UAE economy to grow 3-3.5% in 2016

UAE Minister of Economy Sultan bin Saeed Al Mansouri at the UAE Economic Outlook 2016 conference in Abu Dhabi on Tuesday. - Photo by Ryan Lim

The UAE economy is expected to grow between three and 3.5 per cent in 2016, UAE Minister of Economy Sultan bin Saeed Al Mansouri said on Tuesday.
Speaking to reporters after inaugurating the two-day UAE Economic Outlook 2016 conference, the minister said if "we continue to have minimum increase in the price of oil, we will have three to 3.5 per cent growth in 2016".
For 2015, the UAE has projected a similar three to 3.5 per cent growth in GDP. Al Mansouri is "optimistic about the country's economic growth next year," but there are people who are pessimistic about it, he added.
"We have faced similar circumstances and challenges before also. We were optimistic and we dealt with those challenges professionally at the level of the government, at the level of leadership, local government and the private sector and we managed the situation to continue our growth."
The minister said despite challenging geopolitical situations in parts of the region, the UAE has maintained its growth due to the resilience and economic diversification it achieved in recent years.
The government has issued new rules and regulations to further improve the business environment. The industrial sector, which contributes 14 per cent to GDP, is forecast to expand and contribute 20 per cent in 2021. A big growth will come from non-traditional industries and knowledge-based economy, which will see huge activity in the coming years.
The oil-dominated economy is fast diversifying and in 2021 only a 30 per cent contribution will come from the oil and gas sector, as the non-oil economy is progressively growing due to the opening up of new businesses, Al Mansouri said. The government's emphasis on innovation will open business opportunities as Dh300 billion would be invested in the sector.
Meanwhile, Rashed Ali Abdulla Al Zaabi, acting executive director of planning and statistics at Abu Dhabi's Department of Economic Development, said Abu Dhabi's GDP is expected to grow by 5.2 per cent this year and four per cent in 2016. The emirate will grow by 4.3 per cent during 2015-19, while revenues coming from the non-oil economy will grow 4.6 per cent in 2015 and 3.3 per cent in 2016.
"Next year's growth will be affected by oil prices. After the recent Opec meeting, there will be some impact," he said.
Abu Dhabi is positive and has the capability to absorb the financial shock due to oil prices, he added.
With economic diversification, he said that the economy "is on right track" as Abu Dhabi is not afraid of diminishing oil resources. Abu Dhabi produced 2.94 million barrel of oil per day in 2014, which increased to 3.3 million barrel a day in the fourth quarter of 2015, he said.
Al Zaabi said that Abu Dhabi will complete all big projects it started in the energy, electricity, tourism, transport, financial, insurance and other sectors, which will further boost growth. The social sector has also seen major investments with the education and health sector getting better facilities and development, he added.
- haseeb@khaleejtimes.com
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