Abu Dhabi: Abu Dhabi is showing signs of an economic recovery driven by government spending, a top government official said, adding that investment inflows had increased last year.
Khalifa Bin Salem Al Mansouri, acting undersecretary of the Abu Dhabi Department of Economic Development, said foreign direct investment (FDI) in Abu Dhabi grew 8 per cent to Dh95 billion in 2016, largely due to real estate investment inflows.
He also said Abu Dhabi’s economy, which experienced a downturn caused by low oil prices over the last two years, will experience positive growth in the coming years.
“We are in the downturn of the economic cycle and we see some signs of recovery,” he said, adding that the government is now spending — something evidenced by the announcements of new projects in tourism and infrastructure.
“There were some announcements of tourism projects in Yas and other places of about Dh20 billion. Abu Dhabi Municipality also announced projects of Dh7 billion,” Al Mansouri told reporters on the sidelines of an economic forum organised by Abu Dhabi Department of Economic Development. “Those are signs of early recovery and we expect recovery by the end of this year and early next year.”
Earlier this month, His Highness Shaikh Mohammad Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, attended Miral’s launch of a Dh12 billion plan to develop the southern part of Yas Island, state news agency WAM reported. The plan involves the construction of three zones — a leisure zone, a media district and a residence district.
Speaking on Abu Dhabi’s economy, Al Mansouri said the economy had grown by an average of 4.1 per cent over the last five years, with growth hovering between 2.9 per cent and 3.1 per cent in 2016.
“We expect the economy to grow between 3.7 per cent and 4.1 per cent over the next five years. This year it will be 3 per cent and in 2018, it will be 4 per cent.”
He also said economic diversification was one of the top goals of the Abu Dhabi government and added that they were moving ahead to reduce the dependence on oil for economic growth.
“In diversification, we are following the economic Vision 2030 and we are moving away from oil to non-oil. The contribution of oil sector to the economy used to be 64 per cent earlier but now it is 50 per cent and the non-oil sector’s contribution has gone up from 36 per cent to 50 per cent.”
Due to low oil prices, Gulf states are focusing on diversification of their economies. Abu Dhabi in March hosted a major UN-backed summit aimed at boosting the manufacturing sector in the UAE.
It is also aims to attract $75 billion to the manufacturing sector by 2025, the UAE’s Economy Minister Sultan Bin Saeed Al Mansouri said during the summit.
At the Economic Development Partners Forum on Tuesday, more than twenty government entities in Abu Dhabi signed an agreement to execute the Abu Dhabi plan that aims to improve the business environment and attract more FDI into the country, among other things.