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UAE GDP set to grow over 3.5%, hit Dh1.6 trillion

Isaac John/ Associate Business Editor/Dubai
Filed on October 4, 2015 | Last updated on October 4, 2015 at 07.10 am
UAE GDP set to grow over 3.5%, hit Dh1.6 trillion

Industrial investments to double

The UAE economy is on target to grow more than 3.5 per cent to exceed Dh1.6 trillion in 2015 on the back of a vibrant non-oil sector, UAE Minister of Economy Sultan bin Saeed Al Mansouri said on Saturday.

Despite the plunge in oil prices, the Arab world's second-largest economy is able to maintain such steadfast growth rate because of its successful diversification policy that is increasingly reliant on non-oil sectors to propel expansion. Currently, hydrocarbon revenues account for 25 per cent of gross domestic product and 20 per cent of total export revenues.

Al Mansouri's upbeat projection for the economy comes amid International Monetary Fund's forecast that the UAE's growth is expected to moderate amid lower oil prices. The IMF said the country's non-oil growth, which remained robust at 4.8 per cent in 2014, would slow down to 3.4 per cent in 2015 and would pick up steam from 2016 and post a 4.6 per cent growth by 2020.

FocusEconomics panelists expect the economy to grow 3.5 per cent in 2015, which is up 0.1 percentage point from a June estimate. For 2016, the panel projects a GDP growth of 3.6 per cent, and foresees inflation to average 2.8 per cent.

Al Mansouri said he expects the size of industrial investments in the UAE would double in five years in tandem with the growth of the industrial sector share in the country's GDP, which now stands between 10-14 per cent.

Speaking ahead of the second UAE Economic Planning Forum, a two-day event scheduled onOctober7 in Ras Al Khaimah, Al Mansouri said the government seeks to bolster the competitiveness of the national economy, the flow of foreign direct investments as well as the country's economic relations with foreign countries.

He said the forum, which has innovation and supporting national industries as its top agenda, would seek to boost coordination between local and federal government departments to boost economic competitiveness, bolster the small- and medium-sized enterprises sector and carry out national economic plans.

The UAE ranks second in the GCC and 17th in the world in terms of competitiveness, the World Economic Forum's Global Competitiveness Report 2015-16, released last week said.

"The UAE's excellent macroeconomic environment, highly developed infrastructure and strong institutions provide a solid base," the Geneva-based think-tank said.

With a population of approximately nine million and a GDP per capita of $43,875, the UAE has become a role-model for global economies in transition from oil-reliant to non-oil driven.

The gross official reserves of the UAE is projected to grow 8.9 per cent to $83.7 billion in 2016 from $76.8 billion in 2015 and hit $118.4 billion in 2020 as the economy picks up gradual growth momentum over the next five years regardless of the oil price plunge, a forecast by the IMF shows.

- issacjohn@khaleejtimes.com


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