Strategic Imperatives and Financial Overview
UAE Economic Update
Highlights
Real GDP Growth Forecasts
The IMF joined the private sector consensus in upgrading its growth forecast
for the UAE late last year, taking it to 2.4% for 2010 and 3.2% in 2011. At
Emirates NBD we expect 2.5% and 4.0% respectively.
2008
2009
2010
2011
UAE
7.4%
(3.0%)
2.5%
4.0%
UK
■ Local growth is benefiting from the price of, and the demand for, hydrocarbons
and recovering world trade.
(0.1)%
(4.9%)
0.5%
1.5%
Eurozone
0.3%
(4.1%)
1.0%
1.5%
Germany
0.7%
■
Despite rises in global commodity prices, local inflation has remain subdued
with inflation at the end of 2010 standing at 1.7% y/y.
The latest UAE Purchasing Managers Index for January shows that economic
expansion remains underway, with strength in orders, activity, employment
and purchasing accelerating. Rising costs, however, were beginning to
squeeze corporate profit margins slightly.
Despite debt market tensions in the Eurozone, local CDS spreads have
remained well behaved relatively speaking with little to no contagion.
Promising signs for oil (USD)
Singapore
Hong Kong
(4.7%)
3.5%
2.5%
US
0.0%
(2.6%)
3.0%
3.0%
China
9.6%
9.1%
10.0%
9.5%
Japan
(1.2%)
(6.3%)
2.0%
1.5%
1.8%
(1.3%)
14.5%
5.0%
2.2%
(2.8%)
6.6%
5.0%
Source: Emirates NBD forecasts
160
140
120
100
80
60
40
20
0
2001 2002
2003
2004
2005 2006
2007
― Brent oil $ per Barrel
Source: Bloomberg
Emirates NBD
2008 2009 2010
Rolling 1-year moving average
UAE GDP Composition (%)
UAE GDP by Sector (2009)
100% AED 915b
=
Financials 6%
Tourism & Agriculture
2%
leisure 2%
Others 1%
Components of UAE GDP (2009)
100% AED 915b
=
Net Exports
6%
Transport &
comms 7%
Oil & Gas
29%
Govt. 8%
Real estate
+
2011
8%
Trade 9%
Construction
11%
Manufacturin
g 16%
Source: National Bureau of Statistics
Govt.
Purchases
19%
Private
Consumption
48%
Private
Investment
27%
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