Abu Dhabi skyline
Abu Dhabi has made a slew of policy changes recently to bolster growth. It has also boosted its public spending. Image Credit: Supplied

ABU DHABI: Abu Dhabi’s Gross Domestic Product (GDP) rose 3.3 per cent to Dh226 billion in the first quarter of 2019 as diversification efforts bore fruits.

The number compares with Dh219 billion in the same quarter last year, WAM said in a report quoting Statistics Centre Abu Dhabi (SCAD).

Abdulla Ahmed Al Suwaidi, Acting Director-General of SCAD, said that the diversification policy adopted by the Abu Dhabi government has contributed to creating new tributaries for the national economy, which is now among the most highly developed economies in terms of readiness for production and development worldwide.

Dh 226b

value of Abu Dhabi’s Gross Domestic Product (GDP) in the first quarter of 2019, up 3.3 per cent from Dh219 billion in the same quarter last year

The emirate has become a safe and attractive haven for the flow and strengthening of the national and foreign investment environment.

“The remarkable growth in Abu Dhabi’s economy during the first quarter of 2019 was driven by the growth in the oil sector, while non-oil activities continued to post steady growth rates, underscoring the ability of the emirate’s economy to stay strong,” Rashid Abdul Karim Al Balooshi, Acting Undersecretary of the Abu Dhabi Department of Economic Development, DED, said in a statement.

“This is due to the numerous development projects currently being implemented by the emirate’s government in multiple value-add economic sectors,” he said.

Stimulus package

Abu Dhabi has made a slew of policy changes recently to bolster growth. The emirate last announced a stimulus package of Dh50 billion to stimulate the economy along with measures such as more relaxed rule for residency along with 100 per cent ownership in companies of those who are into real estate, among other sectors.

The emirate is also removing subsidies and loosening its fiscal policy at the same time it has boosted its public spending.

Dh50b

stimulus package announced by Abu Dhabi, alongside measures such as relaxing residency rule, 100 per cent ownership in companies

“The Abu Dhabi economy has posted decent growth given the surge in oil prices and government’s numerous initiatives to stimulate aggregate demand. Moreover, real estate market in Abu Dhabi would also benefit if the US fed decides to cut rates as that will lower the mortgage rates,” Mohamed Murtaza,

Managing Director at Cerebral Capital Advisors based in Abu Dhabi.

Moody’s expect the country’s GDP to grow by 3 per cent in 2020, supported by “expectations of continuous financial support from the Abu Dhabi government”.

Al Balooshi pointed out that the emirate’s GDP growth for the first quarter of the year came amid a series of moves taken to stimulate the business enviroment, including an exemption from licence fees for two years, which contributed to the continued expansion of economic activity in all sectors across the emirate.

Oil income up

Abu Dhabi’s oil GDP also grew year-on-year at both current and constant prices, the report said.

At current prices, oil GDP made up 39.8 percent of the emirate’s overall GDP in the first quarter of 2019, reaching Dh89.9bn, an 11.6 percent increase from Dh80.6bn in the first quarter of 2018.

The oil GDP rate at constant prices also increased from Dh94.7 billion in the first quarter of 2018 to Dh106.8 billion in the first quarter of 2019, marking a rise of 12.8 percent. It contributed 51.6 percent of Abu Dhabi’s GDP during the first quarter of 2019.

- With inputs from WAM