• Home
• /
• Business

GDP grew 7.4pc in 2004

ABU DHABI — While the country’s GDP continued with its march towards higher growth level of 7.4 per cent during the year 2004, the Consumer Price Index also soared by 4.7 per cent in an economy whose non-oil sector expanded by a remarkable 9.4 per cent, said an annual report of the Central Bank of the UAE.

"With output growth outpacing the growth in population, Gross Domestic Product (GDP) per capita, at the constant prices of year 2000, enlarged to Dh74, 900 up against Dh74, 600 in 2003," the report released yesterday said.

Taking prices of the base year 2000, the total GDP reached to Dh323.6 billion from Dh301.3 billion in the year 2003. The non-oil sector grew at 9.4 per cent while the oil sector recorded 2.9 per cent growth as the production figures amounted to Dh93.63 billion from a previous level of Dh91.03 billion, the report said.

Oil sector growth: Data on growth and contribution of non-oil sector to output progression in 2004 indicates that the manufacturing sector achieved the highest rate of increase compared to other sectors, reaching 15 per cent to 2003 level.

The value-added in this sector rose from Dh39.2 billion in 2003 to Dh45 billion in 2004, while its contribution to output rose marginally from 13 per cent to 13.9 per cent. The increase in the output of this sector mainly resulted from the expansion in the refining and production capacities of liquefied gas plants and oil refineries.

The real estate and business services sector recorded the highest increase compared to other service sectors, recording an increase by 14.1 per cent as compared to 2003 level. The value-added products in this sector rose from Dh23.3 billion in 2003 to Dh26.6 billion in 2004, while its contribution to output increased from 7.7 per cent to 8.2 per cent.

Liquidity: An analysis of the factors affecting private domestic liquidity shows that the impact of net foreign assets was expansionary, by Dh15.39, or 11.3 per cent, in addition to the expansionary impact of net domestic credit of Dh41.26 billion, or 27.1 per cent.

However, the impact of net other factors-capital, reserves, provision and other items, which grew by Dh8.84 billion, or 10.02 per cent was contractionary.

Balance of payment: The balance of payments (BoP) achieved an overall surplus of Dh12.8 billion in 2004 against a surplus of Dh4.7 billion in 2003, the report said.

Both the trade balance and the current account reflected higher surpluses compared to 2003, while the negative balance of the capital and financial account increased by 8.3 per cent.

Current account: The Central Bank said that despite an increase by 18.3 per cent in value of total imports (FOB) compared to 2003, the surplus in the trade balance rose by 34 per cent in 2004 compared to 2003, to touch Dh104.9 billion.

This was mainly due to the increase in receipts of exports of the hydrocarbon sector, other exports and re-exports, and accordingly the value of total exports and re-exports increased by 23.3 per cent in 2004 compared to 2003, reaching Dh303.9 billion.

The report further mentioned that the increase in value of exports of the hydrocarbon sector was mainly due to increased production volumes resulting from increase in the refining capacity, gas production capacity and expansion in production of condensates on the one hand, and to the increase in oil prices.

The weighted average price of oil rose from $28.1 a barrel in 2003 to $36.1 a barrel in 2004. This in turn, led to an increase in value of exports of oil (including condensates which are not included in the country’s production quota set by Opec) from Dh81.2 billion in 2003 to Dh108.8 billion in 2004 and in value of exports of gas by 19.9 per cent compared to 2003, to touch Dh17.2 billion.

The value of exports of petroleum products also increased to Dh15.2 billion in 2004 against Dh13 billion in 2003.

Exports: The value of commodity exports including the free zones continued to rise over the past few years to reach Dh60.9 billion in 2004 compared to Dh51.2 billion in 2003. Exports of the free zones constitute 80 per cent of the country’s commodity exports valued at Dh48 billion in 2004.

Moreover, the value of re-exports (including non-monetary gold) also rose from Dh81.6 billion in 2003 to Dh101.8 billion in 2004. A substantial portion of this increase reflects increased reliance by some GCC countries on the country’s seaports for imports, as a result of the GCC Customs Union.

Imports: On the other hand, the value of total imports FOB, including free zone imports climbed from Dh168.3 billion in 2003 to Dh199 billion in 2004. This may be attributed to rapid construction and building activity, rising domestic and external demand resulting from population increase and the need to meet the requirements of re-exports.

The report said that the geographical distribution of the total value of imports shows that the share of European countries dropped from 30.1 per cent in 2003 to 29.8 percent in 2004. Within this group, the share of Germany was the highest, increasing from 7.1 per cent to 7.5 per cent. The share of Asian countries rose slightly to 45 per cent against 44.7 per cent in 2003. The countries of this group maintained the same respective shares recorded last year. Meanwhile, the share of the American countries declined from 9.9 per cent in 2003 to 9.6 percent in 2004.