UAE Economy

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On the back of the surge in oil prices in the past few years and strong regional liquidity, the UAE economy continued to perform well with the economy recording high double digit nominal growth rates since 2003. In 2006, UAE’s gross domestic product (GDP) at nominal prices increased to AED599.2bn, recording a substantial increase of 23.4% over AED485.5bn recorded in 2005. Early estimates from Ministry of Economy (MOE) indicate that the nominal GDP increased by 16.5% to reach AED698.1bn in 2007. In terms of real GDP, early estimates from MOE indicate that the UAE economy grew by 7.4% in 2007 to reach AED420.2bn. Oil prices continued to surge in 2007 with average oil prices increasing to US$69.1/b from US$63.5/b recorded in 2006. However, there were production cuts from OPEC and heavy maintenance work at the end of the year because of which oil production had come down in 2007. As a result of the above, the total value contribution in absolute terms from this sector is expected to have increased marginally by 9.4% to reach AED244.3bn in 2007 over AED223.4bn recorded in 2006. However, non-oil sector recorded a higher growth and as such the share of crude petroleum and natural gas in GDP came down to 35.0% in 2007 against 37.3% in 2006. Private and government consumption is expected to have increased by 18.4% and 22.0% respectively in 2007 compared with a growth of 17.9% and 12.4% respectively in 2006. This is mainly due to the increase in income levels, rising population and higher prices with

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