Growth will be lower than in 2011 but fiscal balance will widen
The UAE's real GDP is projected to expand by around 3.1 per cent in 2012, driven by strong performance in both the hydrocarbon and non-oil sectors, according to Saudi Arabia's largest bank.
Growth in 2012 will be below the 4.9 per cent GDP rise in 2011, when average oil prices climbed to a record high of more than $105 a barrel and the UAE pumped at one of its highest crude output levels.
Forecasts by National Commercial Bank (NCB) showed the UAE's GDP, the second largest in the Arab world after Saudi Arabia's economy, would again record 3.1 per cent growth in 2013 and pick up by 3.2 per cent in 2014.
A breakdown showed the oil sector is projected to expand by around 3.6 per cent in 2012 and the nonoil sector by 3.2 per cent.
"The UAE economy is showing increasingly consistent signs of normalization after the spate of defaults and real estate market shocks in the wake of the global crisis," NCB said in a study sent to Emirates 24/7.
NCB forecasts for 2012 are slightly higher GDP growth estimates by the UAE Ministry of Economy, which expected growth at three per cent.
The report showed the UAE's fiscal surplus would widen to nearly 4.7 per cent of GDP in 2012 from 2.9 per cent in 2011 because of high oil prices, which are expected to remain above $100 a barrel.
The country's current account surplus is also expected to grow to nearly 10.8 per cent of GDP from around 9.2 per cent in the same period.
NCB forecast inflation in the UAE, one of the world's top 10 oil producers, to remain as low as 1.1 per cent in 2012 against 0.9 per cent in 2011. It expected the rate to slightly pick up to 1.5 per cent in 2013 and 1.7 per cent in 2014.
© Emirates 24|7 2012
