Economic growth in the United Arab Emirates accelerated to 4.4% in inflation-adjusted terms in 2012, the fastest clip since 2006, as activity picked up across all sectors, its statistics office said yesterday.
Robust oil prices as well as trade and tourism booms in Dubai, which is recovering from a 2008 burst property bubble, helped lift 2012 gross domestic product growth in line with expectations from a downward revised 3.9% in 2011.
“One of the most important factors is the role played by good and stable oil prices in general over the last year,” the National Bureau of Statistics said.
In January, UAE Economy Minister Sultan bin Saeed al-Mansouri estimated 2012 GDP growth at around 4%, adding a similar rate is expected for 2013. The statistics office had originally reported a 4.2% GDP growth for 2011.
Oil prices averaged $112 per barrel last year, up from $109 in 2011, said the office, which releases GDP annually.
The UAE is the world’s third largest crude oil exporter.
Output in the hydrocarbon sector, which makes up a third of the $383bn economy, rose 6.3% on an annual basis in 2012, slightly slower than a 6.6% rise in the previous year, according to a Reuters calculation based on the data.
Abu Dhabi, home of one of the world’s largest sovereign wealth funds, is the key driver of the hydrocarbon sector, producing almost all of the UAE’s crude oil. It makes up roughly 65% of the UAE economy.
Growth in real estate and business services, which account for a tenth of GDP, doubled to 6.3% while construction added growth of 0.1% after a 2.5% drop in 2011.
Over the past year, developers in Dubai have been dusting off stalled building plans, encouraged by an economic recovery after a 50% drop in house prices from the 2008 peak triggered a series of debt restructurings in state firms.
Dubai’s main airport handled over 13% more passengers and supplanted Hong Kong as the world’s third busiest for international passenger traffic.
Growth in gross fixed capital formation quickened to 9.8% in 2012, the fastest rate since 2008, from 7.3% in 2011.
Analysts expect economic growth to slow in 2013 as an ample oil supply and lower demand from Europe pressure world markets.
“I do not see space for the GCC Opec producers to increase oil output,” said Giyas Gokkent, chief economist at National Bank of Abu Dhabi. “Compared to 2012, the growth rate in 2013 will be lower by default because flattening in the oil sector.”
Abu Dhabi plans to spend $90bn on development projects over the next five years, while Dubai expects to build a new city housing the world’s largest shopping mall and 100 hotels.
A Reuters poll in April forecast GDP growth in the UAE to ease to 3.3% this year.