Abu Dhabi's non-oil real GDP expands by 4.1% in 2021

Statistics Centre - Abu Dhabi (Scad) has announced statistical data that reflects rapid growth in most of Abu Dhabi's oil and non-oil activities at constant prices in 2021, underscoring the effectiveness of economic policies, the robustness of Abu Dhabi's local economy and the recovery from Covid-19 crisis.

The results announced by Scad at constant prices indicate that Abu Dhabi’s GDP at constant prices grew 1.9 per cent in 2021 compared with 2020.

Meanwhile, the non-oil GDP at constant prices grew by 4.1%. During the this year, several non-oil economic activities showed positive growth rates at constant prices, most notably the agriculture, forestry, and fishing activity, which expanded by 23.1 per cent while the manufacturing activity expanded by 21.7 per cent, health and social service activities by 19.7 per cent, arts, entertainment and recreation by 17.3 per cent, wholesale and retail trade by 15.3 per cent, accommodation and food service activities by 14.7 per cent, transportation and storage by seven per cent, and electricity, gas, water supply and waste management activities by 6.9 per cent.

In his comments on the estimates, Mohamed Ali Al Shorafa, chairman of Abu Dhabi Department of Economic Development (ADDED) said the Emirate of Abu Dhabi has managed to overcome the consequences of this extraordinary glob-al situation, thanks to the prudent economic and investment policies set by our wise leadership, including several stimulus initiatives for business and household sectors.

"The initiatives helped the coronavirus-hit sectors to recover and expand while laying the groundwork for a robust economy that can overcome various challenges as well as formulating policies and legislation which keep pace with global changes and support ease of doing business. These initiatives promoted a stimulating investment environment that can attract talent and innovative entrepre-neurs, which is clearly reflected in the 2021 GDP results released by Scad," he said.

Rashed Abdulkarim Al Blooshi, undersecretary of ADDED, underscored the emirate’s economic performance during 2021, saying: "The emir-ate’s wise leadership has closely monitored the developments of the pandemic, and has taken the necessary actions to protect the impacted sectors to ensure a safe and stable transition to the post-Covid-19 phase. This was instrumental to maintain a rapid recovery of the economy and to achieve record growth rates."

"The performance of Abu Dhabi's economy, that made rapid strides for diversification, shows that it is moving from strength to strength, benefiting from a prudent administration that learns from past experiences in its endeavors to optimize opportunities. Although oil continues to be important mainstay for Abu Dhabi economy, the emirate pursues an ambitious strategy for diversification of the economic base and income sources to support its sustainable development plans."

Ahmed Mahmoud Fikri, director-general of Scad, said this strong growth in key economic activities confirms that Abu Dhabi has successfully navigated through the Covid-19 pandemic and is rapidly recovering from the repercussions, which stands in testimony to the sound planning, excellent performance, and the leadership’s clear vision, and proactive response to challenges, as seen in the massive and diverse stimulus packages it launched, with a significant and direct impact on the speed of economic recovery.

Oil & non-oil GDP shares

According to the data released by Scad, the mining and quarrying activity (includes crude oil and natural gas) contributes approximately 50.3 per cent of Abu Dhabi's real GDP in 2021.

On the other hand, the non-oil activities contribute 49.7 per cent of the GDP at constant prices in 2021, despite the remarkable rise of world prices during the same period. The growth proves the remarkable progress Abu Dhabi has made to diversify its economic base and sources of income in line with its ambitious strategic plans.

Impact of Covid-19 on Abu Dhabi economy

Like other regional and global economies, Abu Dhabi's economy was adversely impacted by the repercussions of the Covid-19 pandemic and the accompanying lock-downs in 2020. Coupled with significant decline in oil prices in world markets, the emirate’s real GDP declined by 7.7 per cent, oil-GDP by 3.9 per cent, and non-oil GDP by 11.5 per cent. These declines are comparable to other global economies as a result of the challenges and conditions the world experienced during this unprecedented period.

The estimates of Abu Dhabi’s GDP are counted among the key economic indicators issued by Scad. It is an important input for sustainable development planning, which is intended to support decision-making and advance the best interests of Abu Dhabi's economy.

Economic support to minimise Covid-19 impact

The Abu Dhabi government was quick to respond to the economic challenges posed by the Covid-19 pandemic. It launched an Economic Stimulus Package in March 2020. The package included 16 diverse initiatives under the Ghadan 21, Abu Dhabi's economic accelerator program, with the aim of mitigating impact of the pandemic on individuals and companies, ensuring continued financial growth, maintaining economic gains, reducing the cost of living and providing financing support in response to the prevailing circumstances.

The stimulus package included a waiver of registration fees for commercial vehi-cles until the end of 2020, toll gates, real estate registration and authentication, in addition to the waiver or reduction of bid bonds, a 25 per cent reduction in industrial land rental fees and waiver of all commercial and industrial violation fines.

The package also provided benefits for citizens, SMEs and startup companies, including Dh5 billion subsidy for electricity and water, largely to the commercial and industrial sectors, Dh3 billion credit facility to stimulate the financing of SMEs and to exempt startups from performance bonds. The lending programs included the establishment of a committee to review borrowing options to support local companies.

Furthermore, the benefits provided to the tourism sector included rent rebates of up to 20 per cent and the waiver of all tourist and municipal fees for the tourism and recreation sectors. The capital markets benefited from Dh1 billion allocated to establish a Market Maker fund that provides finance and maintains a constant equilibrium between supply and demand in the stock market.

— muzaffarrizvi@khaleejtimes.com