The UAE's economy grew by 7.4 per cent last year, and the government plans to increase spending despite dipping oil revenues, a report released today said. The growth in Gross Domestic Product (GDP), or the combined value of all goods and services produced in the UAE, was hailed by Sultan bin Saeed al Mansouri, the Minister of Economy, as an indication that the effects of the global financial crisis had so far been "relative and minimal".
While 2009 would be challenging, Mr al Mansouri said spending on projects would continue to increase, even if oil prices remain well off their peak of US$147 (Dh539) per barrel last summer. "Infrastructural projects are expected to continue to be executed, and the government will continue to maintain the increase in the level of its expenditure on projects, despite the decrease in oil revenues as a result of decline of international demand and reduction in production," the statement said.
In his statement Mr al Mansouri also praised the Government's efforts to combat the financial crisis. The UAE central bank has responded to the downturn by extending Dh120 billion in deposits and loans to local banks. Last month Abu Dhabi moved to inject Dh16bn into its local banks, and the central bank recently agreed to a $20bn bond programme to help companies in Dubai through the crisis. "The fast, effective actions taken by the government have assisted to regain balance for certain economic sectors, following the direct difficulties they have encountered as a result of the international financial crisis," the statement said.
"Real" GDP, or GDP adjusted for inflation, is estimated to have grown from Dh498.7bn in 2007 to Dh535.6bn, according to the new figures. Keeping inflation in the equation, GDP grew by 27.4 per cent, largely because of the rise in oil prices last year. Oil prices last year averaged almost $100 after skyrocketing in the early part of the year and reaching $147 a barrel in July before declining. While preliminary, the new GDP numbers fall within the range of many analysts' projections for 2008. firstname.lastname@example.org