Growth to Remain Sluggish: The Continued Global Economic Uncertainty and a New Conservative Policy in Abu Dhabi Mean UAE Economic Growth Is Set to Slow in 2012
Nield, Richard, MEED Middle East Economic Digest
When the global downturn was biting in 20(39, economists were gloomy about the outlook for 2010. But the consensus was that from 2011 onwards, economies around the world would gradually start to pick up and that they would strengthen further in 2012. These predictions were only partly right: 2010 was indeed a difficult year and there was a slight improvement in 201 1. But 2012 now looks like it is going to be even harder than last year, not easier.
The same is likely to be true for the UAE. After a decline in economic growth of 3.5 per cent in 2009, the income from oil sales brought a return to moderate growth in 2010, with real gross domestic product (GUP) growth of 3.2 per cent. In 2011, the loss of almost all Libyan crude production from the global market pushed up Abu Dhabi's oil earnings still further, underpinning economic growth of 4.3 per cent across the UAE. But economists predict that in 2012, the rate of growth will fall to about 3 per cent, the lowest for three years.
This slowdown can be explained by three factors: the impact of a continued economic downturn elsewhere in the world; the return of Libyan production to the global oil market; and the newly conservative orientation of the Abu Dhabi government's economic policy.
The indirect impact of the global economic situation is the most significant of the three. Far from returning to healthy growth, many of the UAE's trading partners look set for economic stagnation, while the expected recovery in Europe is not just stuttering, but grinding to a halt.
This will have a disproportionate impact on …
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Article title: Growth to Remain Sluggish: The Continued Global Economic Uncertainty and a New Conservative Policy in Abu Dhabi Mean UAE Economic Growth Is Set to Slow in 2012. Contributors: Nield, Richard - Author. Magazine title: MEED Middle East Economic Digest. Volume: 56. Issue: 4 Publication date: January 27, 2012. Page number: 32+. © 1999 MEED Middle East Economic Digest. All Rights Reserved. COPYRIGHT 2012 Gale Group.
This material is protected by copyright and, with the exception of fair use, may not be further copied, distributed or transmitted in any form or by any means.