Abu Dhabi aims for GDP growth of up to 7%

Abu Dhabi: The national capital is aiming to achieve a growth rate of 6 per cent to 7 per cent in real GDP (gross domestic product) over the period 2008-2012, according to the annual economic report on Public Finance and Economic Planning released by the Department of Economic Development Sunday.

The comprehensive overview of the economic plan of Abu Dhabi indicates that the non-oil economy will be an important contributor to the overall growth of the economy.

"GDP per capita for the non-oil sector is expected to grow by 3 per cent- 4 per cent during the period (2008-2012) to reach about $30,000 to $35,000 (Dh128,510) by 2012," the report said.

"While overall growth may be affected significantly by oil revenue, the non-oil sector is expected to continue to contribute to overall economic growth by an estimated rate of 4 per cent to 5 per cent, if the oil sector revenues are stable. This would be reflected in that the ratio of the non-oil sector to the oil sector would be 53:47, compared to 60:40 in 2006; which is consistent with the objectives of the vision," it added.

The report said that the non-oil economy is a key driver of growth in Abu Dhabi and it is expected that the non-oil economy will grow from 8 per cent to 10 per cent during the period.

Realistic

Speaking to Gulf News by telephone, Abu Dhabi-based economist Mohammad Amerah called the report "realistic".

"Abu Dhabi's growth momentum will continue all the way up to 2012, for sure. The cushion generated from oil export revenues is most likely to find its way into the non-oil sectors of the economy," said Amerah.

He said the Abu Dhabi economy is growing very fast regardless of the economic difficulties in other parts of the world.

"Abu Dhabi's economy hasn't been much affected by the global financial crisis. The real GDP has been growing regardless of the fact that there has been some inflation.

"The per capita income is going to increase through 2012 on the back of expansion and development in all economic sectors in addition to oil with more investments being pumped into the local economy. This would also mean more jobs being created in Abu Dhabi emirate," said Amerah.

"In absolute terms, the non-oil economy is expected to reach $68 billion to $77 billion by 2012. Within the frame of the non-oil economy, the ten focus sectors are expected to play a key role during the five-year plan period and beyond," the report added.

It noted that continued growth in the oil sector in Abu Dhabi is essential to achieve the targeted growth rate set in the five-year plan.

"Even in the event of a recession in the oil sector, with a growth rate of zero during the period 2008-2012 (which is an excluded possibility), the anticipated performance of the non-oil economy would continue to contribute about 4 per cent to 5 per cent in real GDP growth.

"In that case, the period following 2012 would expectedly experience strong growth in the oil sector," said the report.

It said the increase in productivity could come from the activities of the main focus sectors of the Five-year Plan.

"In particular, the activities of information technology and telecommunications, petrochemicals and plastic products, basic metals, transport and logistics services, will lead to the improvement of productivity, at an estimated range between $170,000 and $250,000 per worker during the plan period," the report said.