Credit Quality and Financial Performance
UAE Economic Update
Highlights
Real GDP Growth Forecasts
The IMF recently upgraded its 2011 forecast for UAE GDP growth to 3.3%,
from 3.2%. We see growth registering 4.0% this year.
2008
2009
2010
2011
UAE
7.4%
(3.0%)
2.5%
4.0%
■
Local growth is benefiting from the price of, and the demand for, hydrocarbons
and recovering world trade.
UK
(0.1)%
(4.9%)
0.5%
1.5%
Eurozone
0.3%
(4.1%)
1.0%
1.5%
"
◉
Despite rises in global commodity prices, local inflation has remain subdued
with UAE inflation at 1.5% y/y in February.
The latest UAE Purchasing Managers Index for March shows that economic
expansion remains underway; the index has been rising steadily since
November. Higher costs due to rising commodities, however, are beginning to
squeeze corporate profit margins slightly.
The money market is witnessing increased liquidity; deposits were up 12.6%
y/y in February. EIBOR has begun to come down recently, and the EIBOR
USD LIBOR spread has plenty of room to fall further.
Hong Kong
Source: Emirates NBD forecasts
Germany
0.7%
(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%
Singapore
1.8%
(1.3%)
14.5%
5.0%
2.2%
(2.8%)
6.6%
5.0%
160
140
Promising signs for oil (USD)
120
100
80
60
40
20
0
2001
2002
2003 2004 2005
2006
2007 2008 2009 2010 2011
Brent oil $ per Barrel
Rolling 1-year moving average
Source: Bloomberg
Emirates NBD
UAE GDP Composition (%)
UAE GDP by Sector (2009)
100% USD 249b
=
Financials 6%
Tourism & Agriculture
2%
leisure 2%
Others 1%
Transport &
comms 7%
Govt. 8%
Real estate
8%
Oil & Gas
29%
Trade 9%
Construction
11%
Manufacturin
g 16%
Source: National Bureau of Statistics
Components of UAE GDP (2009)
100% USD 249b
Net Exports
6%
Govt.
Purchases
19%
Private
Consumption
48%
Private
Investment
27%
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