Non-oil trade passes Dh270bn
ABU DHABI // Non-oil trade passed Dh270 billion in the first three months of the year, in a major boost for efforts to diversify the economy away from hydrocarbons.
The figure represents an increase of 6 per cent on the same period last year, outstripping the Middle East’s modest 0.6 per cent growth, the Federal Customs Authority said.
And global trade for the first quarter grew by just 0.7 per cent in the first quarter, the World Trade Organisation said.
Bryan Plamondon, director for the Middle East at research company IHS Economics, said the UAE’s position at the crossroads between Asia and Europe was a major factor behind the success.
“The UAE is a key point in the world for global trade and has the infrastructure to handle it, so it won’t be as hard hit as other parts of the world by slowing global trade volumes,” Mr Plamondon said. “The UAE is an important logistical hub for a lot of companies that do business in Europe or Asia.”
Gold was the largest import and re-export commodity, with more than Dh26.3bn brought in and Dh14bn re-exported for the first quarter.
Growth in financial services, property and logistics have also been major factors in the development of the non-oil economy.
And the news gets better. Analysts say the strong US dollar, to which the UAE dirham is pegged, and the end to international sanctions against Iran will aid trade growth for the next few years.
The rising dollar has made imports cheaper, and forecasts of an interest rate increase in the US mean the dollar has further to rise yet.
At the same time, the International Monetary Fund says the lifting of sanctions against Tehran, after it agreed to concessions on its nuclear programme, will add $13 billion (Dh47.74bn) to the UAE economy by 2018.
Building a global logistics centre is a key part of the UAE Vision 2021 economic agenda. The Government aims to rank among the world’s top 10 nations on the World Bank’s Logistics Performance Index by then, up from 27th place last year.
Abu Dhabi’s Vision 2030 set a goal for non-oil trade to account for 64 per cent of the economy.
But analysts warn the slowing Chinese economy could pose a threat to the trade outlook.
“A lot of the non-oil exports from the UAE are headed to Asia,” Mr Plamondon said.
Updated: August 31, 2015 04:00 AM