Abu Dhabi's GDP at current prices above Dh800 billion, says SCAD

Abu Dhabi, July 8, 2012 (WAM) - The Statistics Centre - Abu Dhabi (SCAD) on Saturday released preliminary figures shedding light on the key developments in Abu Dhabi economy over the last year. These are the first detailed figures confirming that the Emirate's economy has evidently overcome the repercussions of the global financial crises, posting significant growth all activities and sectors, both oil and non-oil. Growth in the GDP at current prices during 2011 surpassed all the forecasts and estimates made by local and international parties. According to SCAD's preliminary data, Abu Dhabi GDP at current prices grew by 29.9 percent from DH 620 billion in 2010 to Dh806 billion in 2011, exceeding all earlier forecasts and estimates in this regard. These results demonstrate that the emirate's economy has bounced to levels above those that dominated prior to the global financial crisis, giving it a huge competitive advantage and boosting its appeal to local and foreign investors. Abu Dhabi economy overcomes the repercussions of the financial crisis According to SCAD this robust growth presents unequivocal proof that the Emirate of Abu Dhabi has fully recovered from the impacts of the global economic crisis, with data indicating record gains of Dh 186 billion during the year 2011, which saw the GDP at current prices grow to Dh806.031 billion, up from Dh620.316 billion in 2010. Supported by its remarkable resilience, huge financial surpluses, strong growth in non-oil sectors and activities, high oil prices, along with several other factors, the economy of the emirate was fast to overcome the consequences of the global financial crisis, regain stability and, interestingly, achieve some benefits from it. For instance, inflation retreated to only 1.9 percent during 2011. In addition, the crisis gave impetus to non-oil activities, which achieved strong growth rate of approximately 7 percent during 2011. Diversification of the economy A thorough review of the economy of the Emirate of Abu Dhabi will confirm that it has made vast strides and achieved a high level of development and diversity in a short span of time, making continuous gains under a wise management that learned from past experience in its endeavour to take best advantage of available opportunities. This is reflected in the fast-paced economic progress the Emirate has experienced over the past years, in the course of which major projects were undertaken, translating a practical vision and an insightful outlook on the future. This impressive growth enhanced the attractiveness of the national economy to investors worldwide and established the Emirate as a hub for concluding major business deals. In recent years Abu Dhabi economy has advanced in leaps and bounds towards the establishment of a solid infrastructure, founded on economic diversity and comprehensive development. It has become the most dynamic economy in the region and the third largest economy in the Arab world. Breaking through from an economy depending almost entirely on public spending, which is directly affected by fluctuating oil revenues, to a diversified economy that has evolved into regional financial, commercial and tourist centre. Despite the importance of oil to the economy of Abu Dhabi, the Emirate pursues an ambitious strategy that seeks to expand and diversify the economy in order to fortify it against volatile oil prices. In this regard, it can be seen from the figures announced by SCAD, that oil accounted for only 58.5 percent of the GDP of the Abu Dhabi in 2011, despite the considerable rise in oil prices during the same year. This confirms that the Emirate's plans to expand the economic base and diversify the sources of income are progressing successfully. On the other hand, the figures released show that non-oil activities/sectors contributed 41.5 percent of the emirate's GDP in 2011, achieving a relatively high growth rate of 7 percent during the same year. A glance at historical trends shows that the relative share of the various non-oil activities and sectors in the GDP at current prices has doubled 3.4 times from Dh 99264 million in 2001 to Dh 334256 million in 2011, making such activities a major contributor to the Emirate's economy. These developments demonstrate that the Emirate's programs to expand the economic base and diversify the sources of income are progressing successfully with non-oil sectors emerging as key components of the GDP as depicted in the diagram below. Non-oil activities 2001-2011 (N.B.: 2010 and 2011 data are preliminary figures). In parallel with this, the private sector has achieved impressive growth and gained numerous competitive advantages in the fields of production and exports, enabling it to play a more effective future role in facing up to the economic uncertainty on the horizon, both regionally and internationally. Particular attention is therefore paid to empowering the private sector in the economic diversification process through continuing to create the right investment climate to strengthen the role of the private sector in the economic development process. Positive growth in all activities and sectors in 2011 Preliminary data on the GDP of the Emirate of Abu Dhabi over the past year included indicate that all the activities and economic sectors achieved positive growth rates at varying degrees in 2011, most notably the mining and quarrying activity, which grew by 53.2 percent, fuelled by the sharp rise in oil prices in world markets. The transport, storage and communications also recorded a high growth rate (22.4 percent), while manufacturing grew by 21.5 percent, financial corporations and insurance by 13.6 percent, real estate and business services by 11 percent, "electricity, gas and water " and "education" by 10.5 percent each. Furthermore, non-oil sectors and activities achieved positive growth rates, ranging from 1 percent for agriculture, livestock and fisheries to 9.6 percent in health and social services. GDP at current prices 2001-2011 N.B.2010 and 2011 data are preliminary figures As can be seen from the graph above, the GDP of the Emirate of Abu Dhabi at current prices has increased by more than fourfold over the past decade, from Dh 185.7 billion in 2001 to Dh 806 billion in 2011. A success story The economic performance in the course of the past 10 years tells the success story of Abu Dhabi in harnessing natural resources to serve a sustainable development process, in order to ensure that the people enjoy one of the highest living standards in the world. The per capita GDP has increased proportionally and this development with the Emirate of Abu Dhabi today boasts the second highest rate in the world. However, the economic success story is only one aspect of providing a decent living for citizens and expatriates, which would not have been possible without the progress that has been achieved in other walks of life. This achievement can be attributed to the economic policies pursued by the Emirate, which aim to diversify sources of income by diversifying the economic base. Non-oil sectors now contribute the largest share of the GDP. The impressive economic growth experienced by the Emirate of Abu Dhabi in recent years has been characterised by the rapid growth of the non-oil economy, with the pace of moving away from dependence on oil being the fastest in the region. Investment and fixed capital formation SCAD notes that the Emirate of Abu Dhabi, recognising the paramount importance of investment to economic development and productivity, has charted out several plans and programs for comprehensive development in order to encourage investment in various fields and attract national savings to invest in the exploitation of national resources. The Emirate worked on establishing the infrastructure necessary to facilitate economic activity in general and to encourage businessmen to venture into areas of investment that contribute to development and diversification and enhance the competitiveness of local products in the world markets. In light of the massive structural and geo-economic transformations in the world economy over the past few years, and with the increasingly intertwined economic interests among the nations of the world, which have opened geographical borders for movement of capital and energy sources, bringing about a corresponding openness in several markets, the Emirate of Abu Dhabi moved strongly towards economic restructuring and reform, empowerment of private sector and upgrading the performance of government bodies to deliver better services and a higher level of transparency. The outcomes of these measures were tangible in Abu Dhabi's investment experience in recent years, which saw the Emirate evolve into a haven for major international companies, as government policies aligned with private sector efforts to strengthen this partnership. In this regard, a number of important initiatives have been launched, focusing on economic development and supporting local and foreign private investment. During the last decade the economy of Abu Dhabi Emirate experienced an unprecedented boom in terms of its scale, profundity of impact and sustainability. It was triggered by the rise of oil prices in world markets, the revenues of which helped to expand fixed investment in all economic activities in recent years, enabling them to grow at record rates. The key features of the Abu Dhabi development plans consist in enhancing economic performance through the optimal utilisation of the financial resources available to achieve structural balance and diversity in the local economy, increase productivity, improve the of quality services, improving performance in institutional, legal and executive bodies regulating the economy to support openness and transparency, encourage the private sector and enable it to participate in all economic activities; and encourage partnerships between the local and foreign private sectors. In recent years, economic development in the Emirate of Abu Dhabi has been characterised by huge investment in commodity and service activities, in a manner that was conducive to the diversification of national income sources and the creation of an economic base to support financing operations. The size of fixed investments has increased from Dh 47.3 billion in 2005 to Dh 199 billion in 2011, of which non-oil activities accounted for 75.5 percent. The Government of Abu Dhabi has successfully expanded the participation of the public sector in productive development, providing services that contribute to the growth of the economic activity, enabling the private sector to play the role it is best suited for in this regard. Also, the plans recently adopted by the Emirate of Abu Dhabi, cater to an increasing role for local and foreign investment in future development in projects. Several factors must combine to form a conducive business environment that can contribute effectively towards building a broad and diversified economic base. One can confidently say the current progress and prosperity in the Emirate of Abu Dhabi were in large part the product of this environment. SCAD pointed out, there are several underlying factors behind the Emirate's attractive investment climate, including a strategic geographic location, highly developed infrastructure, qualified manpower, the numerous bilateral, regional and international agreements in force that facilitate the flow of capital and merchandise between the emirate countries party to such agreements, free zones and industrial cities promoting local and foreign investment, very low tax where applicable, abundant and low priced energy sources, with oil fuelling economic growth, optimal utilisation of oil revenues, a highly developed network of financial institutions facilitating the flow of capital and serving local and foreign investors. Price stability During the past three years prices in the Emirate Abu Dhabi have been markedly stable. The highest annual inflation rate during this period never exceeded 3.1 percent. The Emirate's inflation rate had hit an all-time high of 14.9 percent in 2008, but bounced to the lowest level ever (0.8 percent) in the following year, responding to a set of direct measures taken by the Government of Abu Dhabi stabilise prices. In 2011 the inflation rate was 1.9%. Interestingly, easing inflationary pressures is seen as one of the favourable outcomes of the global financial crisis. Preliminary data SCAD stressed the need to treat the 2010 and 2011 data released as preliminary data, adding that more accurate estimate will be made in Q4 of the current year, following the analysis of the results of the economic surveys presently in progress, given the significance of these results in assessing the performance of the economy. SCAD further remarked that the preliminary 2011 GDP data released attest to the robust and stable standing of Abu Dhabi economy, enhancing prospects for sustained economic growth and stability.– Emirates News Agency, WAM