UAE's GDP per capita from $23,000 to $28,500, Grew by 28.5% and gained $30 billion

UAE economy to gain $30 billion in 2005

Dec 20, 2005 - 01:00 -

Abu Dhabi, 20 Dec. 05 (WAM)--The UAE's economy is expected to gain a staggering $30 billion in nominal terms in 2005 to become the third largest economy in the Middle East and Central Asia, according to projections by the International Monetary Fund (IMF).

The country's gross domestic product peaked at around USD104.2 billion in 2004 after rocketing by more than 17 percent over the 2003 GDP of USD88.5 billion.

In 2005, the GDP is projected to swell by nearly $30 billion or 28.5 percent to a record USD133.8 billion and will continue its expansion to reach USD150.9 billion in 2006.

IMF figures for the economies of 32 countries in the Middle East and Central Asia showed the UAE's GDP ranked third after Saudi Arabia and Iran and accounted for nearly 9.2 percent of the total GDP of the 32 countries listed by the IMF.

The situation is in contrast with two decades ago, when the UAE had one of the smallest economies in the region as its oil production was relatively low and the country has just embarked on a massive programme to diversify its economy.

Experts said the rapid growth in the UAE's economy was a result of a sharp increase in its crude production, steady expansion in the non-oil sector, the increase gas output and the construction of new petrochemical and refining projects.

Diversification programmes in the UAE have largely paid off in terms of reduced reliance on crude exports as the oil sector's share of the GDP has plummeted to only around a third from more than two thirds in early 1980s. As a result, the UAE's economy is gradually becoming less vulnerable to oil price fluctuations.

Although most other regional economies are projected to rise sharply in 2006 because of expectations oil prices will stay high, the UAE will still maintain the third largest economy in the Middle East and Central Asia, according to the IMF.

A breakdown showed Saudi Arabia was the dominant economic power in 2005, with a GDP of around $314.2 billion. Iran's GDP was put at USD203.3 billion.

In 2006, the GDP of these two countries is projected to climb to around USD349.4 billion and USD242.2 billion respectively.

But in per capita terms, the UAE was expected to remain in the second place after Qatar given its high GDP and relatively small population compared to that of Saudi Arabia and Iran. Independent estimates put the UAE's per capita income at around USD23,000 in 2004 while it is predicted to jump to nearly USD28,500 in 2005.

Given its smaller population and a sharp increase in LNG exports, Qatar has remained the richest country in the region in terms of per capita income, which peaked at around USD39,000 and is projected to swell to a record USD45,000 this year.

In its latest annual review for the UAE, the IMF sounded optimistic about the country's economic prospects in the medium run.

" The medium-term outlook remains favorable based on current expectations that world oil prices will remain high and the UAE's oil production will increase steadily to more than 3 million barrels per day by 2010," it said.

" Real non-hydrocarbon GDP growth is projected to remain robust as the economy gains traction from the ongoing productivity enhancing structural reforms, improved investment regime, and a more streamlined business climate. During 2006-10, both the fiscal and external current account balances are projected to continue to register large surpluses averaging about 22.5 percent and 17 percent of GDP, respectively." It noted that with an oil production close to capacity at about 2.5m bpd, the UAE currently ranks as the 9th largest crude oil producer and 6th largest net oil exporter worldwide. But it added that the country's role in the global oil market will "certainly increase further in the future, as its oil reserves amount to 10 percent of the world total." WAM/AZ 12 12 CCCCQQE

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