x Abu Dhabi, UAEThursday 27 July 2017

Exports boom for Abu Dhabi

Non-oil trade falls in the capital, sparking worries about the health of demand in the domestic economy.

The Mina Zayed Port in Abu Dhabi. The emirate's trade volumes were bolstered by non-oil exports, which grew by 22.5 per cent.
The Mina Zayed Port in Abu Dhabi. The emirate's trade volumes were bolstered by non-oil exports, which grew by 22.5 per cent.

Abu Dhabi registered a large increase in exports and re-exports last year, but lower demand for imports caused overall trade volumes to decline.

The emirate's overseas non-oil trade dipped 2.58 per cent last year to Dh109.2 billion (US$29.72bn), according to the Department of Finance.

Trade volumes were bolstered by non-oil exports, which grew by 22.5 per cent to Dh11.61bn. The emirate's re-exports also rose, by 26.4 per cent, to Dh10.9bn.

However, customs statistics also show imports fell 7.8 per cent to Dh93.8bn last year compared with the previous year, which economists attributed to a slowdown in the emirate's domestic economy.

Abu Dhabi's Vision 2030 plan focuses on the creation of domestic industries and diversification away from the oil trade. Trade figures for last year including oil have yet to be released.

"The statistical data for 2010 show continued growth in the non-oil exports and re-exports compared to 2009, with a minor decline in imports," said Saeed al Muhairi, the director general of the General Directorate of Customs in Abu Dhabi. "These figures reflect the overall improvement of the trade balance of Abu Dhabi over the past year.

"We continuously strive to facilitate foreign trade and reinforce growth in the volume of exports, fuelling the economic activities in the country," added Mr al Muhairi.

However, economists are more worried by the decrease in trade. Jarmo Kotilaine, the chief economist at National Commercial Bank of Saudi Arabia, expressed surprise that foreign non-oil trade had fallen.

"I think it does certainly make me feel a bit more concerned about the broader economic demand situation in the emirate," he said.

He said the increase in exports reflected strong levels of demand among emerging markets. "These Gulf countries have generally been quite successful for finding markets for their exports in China, India and elsewhere.

"However, with respect to domestic demand, that's more perturbing. It's in line with generally flat figures we've seen on bank credit," he said.

Net loans and advances increased by 1.3 per cent last year to Dh1.03 trillion by the end of December, according to data from the Central Bank.

Mr Kotilaine said imports had dropped even though prices for imports, such as foods and metals, had risen.

"There was significant inflation in the kinds of goods that Abu Dhabi has to import," he said. "That inflation alone would have pushed up the import bill, all other things being equal."

Abu Dhabi's largest source of non-oil imports was the US, followed by Saudi Arabia and Japan. Emerging markets accounted for only a part of the emirate's non-oil exports, however, with Brazil topping the list of destinations for Abu Dhabi produce, followed by Norway and Saudi Arabia.

 

ghunter@thenational.ae