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Trade and tourism to lift investor sentiment in UAE

Re-exports surge 19% with overall sector set for 5% growth.

15 best: Traditional dhows
Image Credit: Javed Nawab/Gulf News
Traditional dhows line Dubai Creek on a typical morning. The dhows journey across trade routes between the UAE, Iran, and Pakistan with cargo ranging from food to fuel.
Gulf News

Abu Dhabi:  Strong growth in trade and tourism sectors could lift investor sentiment going forward as the UAE's non-oil foreign trade recorded 11 per cent growth during the first nine months of this year.

Hotel revenues in Dubai increased 6 per cent to Dh9.23 billion during the first nine months compared to Dh8.70 billion in the corresponding period last year.

Dr Mohammad Al Asoomi, a UAE-based economist, said that the year-on-year growth showed that the country was once again growing in its main econ-omic sectors.

Higher demand

"There is obviously an increase in local demand, and I believe this will mean an overall growth of 5 per cent in non-oil sectors by the end of this year," Al Asoomi told Gulf News. He added that non-oil trade was expected be much better next year given the potential for the banking and financial sector to grow in 2011.

The UAE's non-oil foreign trade rose Dh54 billion, or 11 per cent to Dh540.5 billion in the first nine months of this year, up from Dh486.4 billion in the corresponding period last year, Federal Customs Authority (FCA) statistics revealed yesterday.

India and China remained the top exporters to the UAE.

The most notable developments were the record surge in exports and re-exports compared to imports.

"This surge underlines that the UAE's recent economic diversification policies have been successful when compared internationally in reducing the trade balance deficit," the FCA statement said.

While imports grew 5 per cent to Dh350.6 billion, exports for the first nine months rose to Dh61.8 billion and re-exports increased by 19 per cent to Dh128 billion.

Al Asoomi said that the UAE's port capacity meant that the country should remain the main trading centre in the GCC in the near future. In terms of volume, non-oil trade in September 2010 grew 26 per cent to Dh62.9 billion, up from Dh50 billion in September 2009, with non-oil exports rising 46 per cent, non-oil re-exports rising a 35 per cent, and non-oil imports rising 19 per cent year-on-year.

Al Asoomi said that the figures indicated that the UAE economy would make a full recovery soon, except in its real estate and construction sectors.

Gold tops lists

Gold was the highest imported non-oil commodity at Dh4.9 billion, despite the current high price, the statistics show. Gold was also the top export from the UAE at Dh3.3 billon, whereas diamonds were highest on the re-export list at Dh5.7 billion.