During a year in which jitters about the US Federal Reserve’s tapering of monetary stimulus and a cooling in China’s economy took a toll on emerging markets, growth in the UAE surprised on the upside. Overall GDP reached 5.2 per cent, according to data released on Sunday by the National Bureau of Statistics. That was ahead of Turkey (4 per cent), India (4.7 per cent), Brazil (2.3 per cent) and Russia (1.3 per cent), which felt the fallout from currency swings and sluggish investment.
The UAE’s growth rate was the fastest since 2007 and also ahead of a forecast of 4.8 per cent by the IMF. The rate of expansion is a reflection of the UAE’s rapidly emerging status as a haven for stability in a region still beset by turmoil, as well as a sharp recovery in domestic consumer demand.
The economy was also shielded from the strife in other emerging markets thanks to the dirham’s currency peg to the US dollar and the predominant absence of foreign investors from its stock markets.
Finally, relatively high oil output and crude prices also provided a boost. Crude output averaged 2.8 million barrels per day, up from 2.64 million in 2012.
Prices averaged US$108 per barrel during the year, the bureau estimated. The oil sector expanded by 4.8 per cent, compared with 5.4 per cent growth in the non-oil part of the economy. The non-oil sector accounted for 67.3 per cent of overall output, the data showed.
Still, officials will be mindful that the largest contributor of growth outside the oil and gas sector was “property and business services”, accounting for 12.3 per cent of GDP and swelling 8.7 per cent during the year.
The sector expanded at a much faster rate than three of the other main pillars of the economy – trade; transport and communications; and manufacturing, which recorded growth of 2.4 per cent, 7.3 per cent and 1.2 per cent, respectively.
Last year’s property sector growth followed two subsequent years of double-digit expansion rates. Combined with transport and communications, the two sectors were the biggest drivers of total overall output. As the property market has revived, it has also stimulated a restart of construction projects. Last year was the first time since 2009 that construction provided a positive lift to growth, accelerating by 3.3 per cent.
A debt-inflated bubble in the property market was a key propeller of output in the boom years up to six years ago. When investor sentiment cooled in the wake of a global credit crunch, prices collapsed by more than half in the following two years.
Output sagged in 2009, as a result. Several officials had expressed hope at the time that the downturn would allow for a rebalancing of the economy, giving property a backseat role and enabling the UAE’s historic drivers of logistics and trade to take the strain.
The shift would allow for more stable expansion in the long run. The latest data shows that property is firmly back in the economy’s driving seat.
This year, the growth outlook remains promising. Dubai’s selection in November as the host of the World Expo 2020 has lifted business sentiment, while supporting activity in the wider economy.
The inclusion from this month of several UAE stocks in the index provider MSCI’s Emerging Markets Index is placing the country on the radar of more foreign investors. The property market may also be cooling off, according to recent property data from the first quarter of this year. Although that could pin back growth, it would likely help temper the risk of another potentially destabilising property bubble developing.
The oil sector’s role is also likely to retreat. As oil output had declined to 2.61 million barrels per day last month, the overall contribution of the sector to GDP was expected to decline, estimates Alp Eke, senior economist at National Bank of Abu Dhabi. He forecasts growth of between 4.1 and 4.2 per cent this year. That is still likely to be better than Turkey, Brazil and Russia this year, if not India.
tarnold@thenational.ae
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Most F1 world titles
7 — Michael Schumacher (1994, ’95, 2000, ’01 ’02, ’03, ’04)
7 — Lewis Hamilton (2008, ’14,’15, ’17, ’18, ’19, ’20)
5 — Juan Manuel Fangio (1951, ’54, ’55, ’56, ’57)
4 — Alain Prost (1985, ’86, ’89, ’93)
4 — Sebastian Vettel (2010, ’11, ’12, ’13)
Scoreline
Australia 2-1 Thailand
Australia: Juric 69', Leckie 86'
Thailand: Pokklaw 82'
The bio
Favourite book: Peter Rabbit. I used to read it to my three children and still read it myself. If I am feeling down it brings back good memories.
Best thing about your job: Getting to help people. My mum always told me never to pass up an opportunity to do a good deed.
Best part of life in the UAE: The weather. The constant sunshine is amazing and there is always something to do, you have so many options when it comes to how to spend your day.
Favourite holiday destination: Malaysia. I went there for my honeymoon and ended up volunteering to teach local children for a few hours each day. It is such a special place and I plan to retire there one day.
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Killing of Qassem Suleimani
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
Expert advice
“Join in with a group like Cycle Safe Dubai or TrainYAS, where you’ll meet like-minded people and always have support on hand.”
Stewart Howison, co-founder of Cycle Safe Dubai and owner of Revolution Cycles
“When you sweat a lot, you lose a lot of salt and other electrolytes from your body. If your electrolytes drop enough, you will be at risk of cramping. To prevent salt deficiency, simply add an electrolyte mix to your water.”
Cornelia Gloor, head of RAK Hospital’s Rehabilitation and Physiotherapy Centre
“Don’t make the mistake of thinking you can ride as fast or as far during the summer as you do in cooler weather. The heat will make you expend more energy to maintain a speed that might normally be comfortable, so pace yourself when riding during the hotter parts of the day.”
Chandrashekar Nandi, physiotherapist at Burjeel Hospital in Dubai
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
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Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
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Rating: 3.5/5
