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THE ECONOMY - ECONOMIC DEVELOPMENT


Dubai is world's 5th fastest growing city economy: Report


posted on 20/08/2015

Dubai has been ranked among the top 10 cities that are powering economic growth within their nations, according to a report by the Brookings Institution.
The report by the leading American think tank has ranked Dubai fifth worldwide for 2014, up from 18th position in the previous year.
The report said Dubai's growth was boosted by a 4.7 per cent annual rise in employment.
The emirate also recorded the fastest growth relative to its national economy with a 4.5 per cent rise in gross domestic product, or GDP, per capita, versus 1.6 per cent growth for the UAE as a whole.
Overall, the report found that economic activity and growth in 2014 remained disproportionately concentrated in the world's major metropolitan areas.
The 300 largest metropolitan economies housed 20 per cent of both the world's population and its employment.
The report found that developing metropolitan economies were growing much faster than their more developed peers.
According to the Washington-based Brookings Institution's Global Metro Monitor, "no metropolitan area grew faster relative to its national economy than Dubai, where the business and financial services sector helped drive 4.5 per cent growth in GDP per capita."
"The most populous city in the UAE, Dubai is a global hub for transportation, tourism, trade and professional services," the report elaborates.
"Thanks to an ambitious strategy to diversify its economy, Dubai no longer relies on commodities to power its economic growth, and today the service industry accounts for more than 70 per cent of total GDP," it highlights.
These findings come from a report by the Brookings Institution's Metropolitan Policy Programme, released as a part of the Global Cities Initiative, a joint project of Brookings and JPMorgan Chase.
Overall, Dubai is ranked number five among the list of elite global metropolitan cities that are pushing the boundaries of the country's economic growth.
Besides the top-ranked Macau, Dubai was the only developed economy city to feature in the Top 20 fastest growing metros, with GCC peer Riyadh ranked at number 25 on the list.
This year's Global Metro Monitor, the fourth edition of the report, analyses 2013-14 data on the performance of the world's 300 largest metropolitan areas based on their annualised growth rates of GDP per capita and employment.
The Monitor combines these two key economic indicators into an economic performance index on which the 300 metro areas are ranked for 2014.
The report found that while developing metropolitan areas still lead the world on economic growth, developed metro areas from the US and the UK registered significant improvements in 2014.
Macau, China was the world's top-performing metro area in 2014, followed by the Turkish cities of Izmir (2), Istanbul (3) and Bursa (4). Dubai is ranked at number five, ahead of Chinese cities of Kunming (6), Hangzhou (7) and Xiamen (8).
The report said that the 300 largest metropolitan economies are home to 20 per cent of the world's population and jobs, but account for almost half of global GDP, underscoring that the global economy is truly a metro economy. – Khaleej Times - http://www.khaleejtimes.com/nation/dubai-worlds-5th-fastest-growing-city-economy-report

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UAE economy set for ‘soft landing’ this year, analysts say


posted on 18/08/2015

The UAE economy is set for a "soft landing” this year, as growth slows to its lowest rate in six years, say analysts from Bank of America Merrill Lynch.
"Soft landing” is an industry term for a slowdown in economic growth that does not worsen inflation and unemployment.
"Economic activity [in the UAE] has started to show signs of weakness,” wrote Jean-Michel Saliba, an economist at the bank, in a research note.
"It is likely to face headwinds … due to a confluence of low oil prices, a less favourable external backdrop, and gradually tightening domestic liquidity.”
The IMF forecasts UAE economic growth of 3 per cent this year, down from 4.6 per cent last year, as the oil slump results in weaker real estate and corporate activity.
Government spending cuts and tax increases would also drag down economic growth, it said. Standard Chartered projects the UAE's GDP growth at between 3.5 and 4 per cent this year, but Standard and Poor's expects growth of just 2 per cent.
Economists agree that this year's GDP growth rate will be less than last year's.
"The UAE economy is slowing down for sure,” said Philippe Dauba-Pantanacce, a senior economist for the Middle East at Standard Chartered.
"But this is still a very good pace of growth. It is always better to grow steadily and at a more reasonable pace than to go through cycles of boom and bust. "The UAE is by far the most diversified economy in the region. And Dubai is the best form of diversification away from oil that the UAE could ever have dreamed of.”
But low oil prices have had an adverse effect even on Dubai, as they weighed on property sales, consumer spending, banking liquidity, and consumer and corporate sentiment.
Trevor Cullinan, an analyst at Standard and Poor's, said rising oil output and government investment spending should bolster economic growth in the UAE this year. "However, the more than halving in the oil price since mid-2014 will dampen private sector domestic demand and the overall net export position,” he said.
The UAE's pace of economic growth is expected to decline 1 per cent each year up to 2020 because of planned government spending cuts.
The net debt position of Dubai's government-related entities could also prove "challenging” next year, said Mr Saliba, as about US$7 billion of debt payments by GREs will come due next year. – The National - http://www.thenational.ae/business/economy/uae-economy-set-for-soft-landing-this-year-analysts-say

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General Index of Confidence in the business climate reflects optimism about economic conditions in Abu Dhabi in Q2


posted on 05/08/2015

The general index of confidence in the business climate in the Emirate of Abu Dhabi maintained its level during the first quarter of 2015 compared to the fourth quarter of 2014, with 61 and 63 respectively as a reflection of the results of both the current situation index and the future situation index with 56 and 64 respectively during the first quarter of 2015.
The directions of the general index of confidence in the business climate and its sub-indexes issued by the Studies Division of the Department of Economic Development, in collaboration with the Statistics Centre - Abu Dhabi during the first quarter of 2015 showed a disparity in the evaluation of businesses-operating in all economic activities, except the commercial activity - to the current economic conditions compared to the last quarter of 2014, while their future prospects were adequal.
This disparity comes because of the uncertainty of businesses amid concerns associated with trends of the economic performance in oil-exporting countries due to fluctuations in world oil markets, despite the good performance of many non-oil sectors in the Emirate of Abu Dhabi's economy.
It is expected that the good financial conditions in the Emirate, as reflected in the credit quality classification (+AA) according to Standard & Poor's Agency, contribute in the promotion of confidence in the Emirate's economy, as Standard & Poor's Agency excluded the impact of the fluctuations in oil prices on development projects in Abu Dhabi.
Abu Dhabi Business Centre exerts continuous efforts to improve the business environment and investment climate in the Emirate by improving the services provided to businessmen and investors: The Centre recently announced reducing the average number of procedures for the issuance of commercial licenses by 50%, the number of days necessary to start a business by 50% and the average cost of issuing commercial licenses by 30%, and it is currently working on completing the common system for the issuance of various commercial licenses in Abu Dhabi by next year.
The Government of the Emirate of Abu Dhabi, moving forward in its efforts to strengthen domestic demand, through the continued implementation of capital projects in various sectors with a value of 330 billion dirhams during the period (2013-2017), can contribute in enhancing the confidence of businesses in the business climate and economic conditions in the Emirate.
Abu Dhabi Business Centre issued during the first quarter of 2015 about 2452 new commercial licenses, reflecting the continued establishment of businesses in light of the attractive business environment and investment climate in the Emirate.
The establishments operating in various economic activities expressed optimism about their internal situation and the economic situation in general during the second quarter of 2015, according to the future situation index reaching 64 points in the first quarter of this year.
The results show an improvement in the performance of the trade sector, reflected by the increase in the total value of non-oil merchandise trade in the Emirate of Abu Dhabi during the last quarter of 2014 by 15.8% compared to the same quarter of 2013 to reach about Dh 39.4 billion.
The value of non-oil exports increased by about 12.6% to reach Dh 4.7 billion. The industrial sector's performance was affected by the decrease of prices, as the producer prices index decreased by 8.6% in the fourth quarter of 2014 compared to the third quarter of the same year.
This came despite the good performance of the transformative industries, as the Industrial Production Index increased by 2.2%, while in the service sectors, the tourism sector has significantly improved, and such improvement was reflected in the increase of the number of guests and occupancy rate in addition to the hotels revenues during the month of January 2015 compared to the same month of 2014, according to the report of Abu Dhabi Tourism and Culture Authority.
The profit levels declared by some banks reflected an improvement in the performance of the banking sector during the first quarter of 2015. The real estate sector also performed well.
At the level of the size of the enterprise, the trends of the general index of confidence in the business climate show continued optimism among businesses of all classifications during the first quarter of 2015. The optimism level was adequal between large and medium-sized enterprises, with the index recording (61.4) points and (61.3 points) respectively, compared to (58.4) points for the small-sized enterprises.
This comes after a significant improvement in the levels of optimism among small and medium enterprises during the said quarter compared to the same quarter of 2014.
This also comes in line with the overview of the businesses to the economic performance of the sectors in which they operate, as many enterprises mentioned the improvement in business and sales volume and the stability of product prices and employment rate in all sectors during the first quarter of 2015. This is considered a reflection of the positive impact of development projects under implementation in various areas in the Emirate of Abu Dhabi.
At a time when optimism levels have improved among the enterprises operating in all areas of the Emirate during the first quarter of 2015 compared to the same quarter of the previous year, the economic establishments operating in Al Ain showed higher optimism levels compared to the establishments operating in Abu Dhabi and the Western Region, as the index recorded 62 in Al Ain, 61 in Abu Dhabi and 58 in the Western Region.
This optimism included the assessment of the facilities for their performance and the economic situation during the first quarter of 2015 as well as their expectations about future economic conditions.
While the majority of businesses in the Emirate of Abu Dhabi stated that there are no impediments affecting their work, some facilities, in the three regions of the Emirate, mentioned some factors affecting their activity, mainly the rents, labour laws, labour skills and prices of raw materials.
Other factors included the illegal competition, communications, transportation, and financing which affected the enterprises of various kinds. – Emirates News Agency, WAM - http://www.wam.ae/en/news/economics/1395284011509.html

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IMF lauds UAE’s fiscal consolidation efforts


posted on 05/08/2015

The UAE authority's efforts to consolidate the fiscal position is appropriate and would reduce fiscal vulnerability and ensure intergenerational equity, the IMF said in its staff report on the UAE.
The UAE has introduced a number of measures from the beginning of this year to reduce government expenditures through energy subsidy reforms. Last month the government removed fuel subsidies in the country which is expected to save about US$7 billion (Dh25.7 billion). Total subsidies and transfers cost the UAE government US$17 billion in 2014 (12 per cent of total government spending).Starting January this year, Abu Dhabi took steps towards reducing domestic power subsidies. Prior to the reforms, electricity subsidies for residential buildings ranged from 55-90 per cent and water subsidies from 79-100 per cent. A new tariff system, effective 1 January 2015, is based on usage. Water tariffs will be increased by up to 170 per cent and electricity tariffs by up to 40 per cent for expatriates and UAE nationals will have to start paying for water and pay higher electricity tariffs, depending on consumption.
Subsidy reforms are seen as a progressive step in fiscal reforms in the context of falling oil prices and a decline in government revenues by 22.5 per cent this year as estimated by the UAE Central Bank. Lauding the fiscal reform efforts, the IMF said the macroeconomic policy mix should focus on gradual fiscal consolidation, while maintaining the peg and easing liquidity management if needed. Fiscal consolidation will also help bring the external position closer to the level consistent with medium-term fundamentals. However, its pace should take into account the available fiscal buffers and the impact on the broad economy,” Zeine Zeidane, Advisor, Middle East and Central Asia Department.
While fiscal consolidation requires spending cuts, the IMF has warned that the quality of spending cuts is crucial to avoid damaging the country's competitiveness and long-term growth prospects. Government investments should be preserved relative to non-hydrocarbon GDP to support infrastructure, while the implementation of megaprojects by government related entities (GREs) should be gradual, in line with the expected demand. Public sector wage bill growth should be controlled while energy subsidies and capital and other transfers should be reduced.
Budget processes
The IMF also recommends taxation an effective fiscal policy option to raise more non-hydrocarbon revenues. Fiscal policy implementation requires further strengthening annual budget processes, including strong Public Finance Management Systems. Close oversight and continued strengthening of debt management frameworks are crucial.
On the monetary policy front the IMF recommended maintaining of the dirham's peg to the dollar and strengthening liquidity management and deepening money markets. In an adverse scenario with a decline in deposits, liquidity management could be eased to support credit growth.
Along with fiscal and monetary policy adjustments to deal with the current economic conditions, the IMF has recommended effective structural reforms to deal with long term challenges. "Implementation of structural reforms should be pursued to strengthen competitiveness and accelerate private sector-led job creation for nationals. These could focus on further opening up foreign direct investment, improving selected areas of the business environment, and easing access to finance for start-ups and small and medium enterprises (SMEs),” the IMF report said. – Gulf News - http://gulfnews.com/business/economy/imf-lauds-uae-s-fiscal-consolidation-efforts-1.1561337

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UAE non-oil sector rebounds


posted on 05/08/2015

The UAE's non-oil private sector regained some of the lost growth momentum in July as business conditions improved at a faster pace in the emirate, a corporate survey revealed.
Latest data showed that business activity growth in the UAE's non-oil private sector rebounded last month from a 22-month low in June as output and new orders rose at sharper rates, contributing to a robust overall improvement in business conditions.
The seasonally-adjusted Emirates NBD UAE Purchasing Managers' Index, which covers manufacturing and services, rose to 55.8 points last month from 54.7 in June. A level above 50 indicates expansion and below 50, contraction. The output sub-index also rose sharply to 60 points in July from 57.5 in June, while the new orders sub-index climbed to 60.2 from 57.7 points. "July's PMI is another indication that growth in the UAE's non-oil economy is proving resilient in the face of a challenging regional and global economic environment," said Jean-Paul Pigat, senior economist at Emirates NBD.
The survey, sponsored by Emirates NBD and produced by Markit, said growth at the start of third quarter was broadly in line with the average seen over the second quarter (56 points), but remained weaker than the trend recorded so far this year (56.8).
"The rebounds in output and new orders were particularly encouraging, and we expect this momentum to continue through the remainder of 2015," Pigat said.
Job creation was also sustained at a solid pace as non-oil private sector employment in the UAE continued to increase in July, marking a 43-month period of job creation. The rate of hiring was unchanged from June's solid pace, and remained in line with the average noted over six years of data collection. A number of panellists associated workforce growth with the start-up of new projects.
"The rebound in non-oil sector was expected by government and private businesses alike. The IMF has in fact positively revised the non-oil GDP growth for UAE to 4.4 per cent this year and 4.5 per cent next year in view of the Dubai's thrust for the core service sectors and diversification for non-oil sectors by Abu Dhabi. This change in the outlook will bring about positive sentiments in the business community," Atik Munshi, managing partner, Horwath Mak, told Khaleej Times.
Dr Preeta George, acting dean and professor of economics at SP Jain School of Global Management, said the rebound of the non-oil private sector in July after the holy month of Ramadan is a normal phenomenon, but it is of particular significance this year given the dip in oil prices and its expected impact on the growth of the economy which is revised downwards to 3.2 per cent.
Referring to the IMF, she said the non-oil economy is estimated to grow by 4.4 per cent this year and this will provide a cushioning effect to growth. "This has been possible due to the growing importance of this sector and can be attributed to UAE's pioneering efforts towards diversification. With several projects lined up to meet the 2020 deadline, the non-oil sector is poised to play a significant role in UAE's growth story."
On the price front, data highlighted divergent trends in July. The rate of cost inflation picked up to the quickest since February, while charges fell for the fifth time in the past six months. The survey said cost pressures intensified in July, amid faster rises in both purchase prices and salaries. The rate of input price inflation picked up to a five-month high, but remained subdued relative to the series average.
Prices charged by non-oil private sector companies decreased in July. Although marginal, the latest fall was the fifth in the past six months. Some firms saw their pricing power diminish as they attempted to secure new business. "Dubai and other emirates have tried to reduce their reliance on oil revenues and have taken measures to boost the service and manufacturing sectors," Munshi said.
He said the service sector is expected to see a major positive change for the UAE in the near future, where its contribution to the gross domestic product is anticipated to improve substantially.
"This is a sign of that the economy is moving towards being mature. The sentiment of the market will further improve if the overall market size of the UAE escalates. Once we reach near World Expo 2020 the economy is likely to be even better," he said. – Khaleej Times - http://www.khaleejtimes.com/business/local/uae-non-oil-sector-rebounds

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With prominent UAE contribution, UN reaches ground-breaking agreement on Sustainable Development Goals


posted on 04/08/2015

NEW YORK: With a prominent UAE contribution, the United Nations yesterday concluded negotiations on the landmark Sustainable Development Goals (SDGs), the most far-reaching international decision on development in the 70-year history of the organisation.
The goals specify outcomes to be achieved by 2030 across a broad range of social, environmental, and economic areas.
Reflecting its international leadership, the UAE was notably credited for driving new goals on gender equality and sustainable energy, and also led the 22-country Arab Group in the negotiations. The SDGs will be adopted by all 193 UN member countries during a summit in New York City on September 25-27, influencing government policies and trillions of dollars in spending.
"The SDGs represent a breakthrough in the way the international community thinks about the interlinkages between growth, social norms, and the environment, and the UAE is proud to have high ambitions across these objectives," said Lana Nusseibeh, the UAE's ambassador to the United Nations. "Countries now have a clear guide for transformation at home, as well as for the way they can support sustainable development in other countries."
The SDGs have two principal dimensions. They first represent a commitment by each country to achieve the SDGs domestically. Annual reports will look at performance in the wide range of sectors covered by the SDGs, from school enrolment rates to provision of clean drinking water to agricultural practices. For the UAE, most goals will be met automatically because of the UAE's high development level and existing green growth strategy. However, the UAE will need to establish a framework to monitor and report progress. Second, the SDGs encourage investors and providers of foreign aid to align their activities to achieve the 2030 outcomes in other countries. The UAE has been the world's top donor for two years in a row, based on aid as a percentage of gross national income, resulting in high interest in the negotiations on UAE positions. The forthcoming strategy under the Ministry of International Cooperation and Development will outline how UAE aid will be directed toward the SDGs.
"The SDGs validate the UAE's longstanding approach to make development progress through innovation," said Majid Al Suwaidi, the lead negotiator and the head of climate affairs and sustainability at the Ministry of Foreign Affairs. "The challenges of resource scarcity and climate change mean we have to quickly find new means to both raise people out of poverty and enable continued economic growth in wealthier countries. We were able to take many lessons from our own development and embed them in the SDGs - for instance, granting equitable rights for men and women to strengthen our economy, and using renewable energy to power it."
The SDGs are the successor of the Millennium Development Goals (MDGs), which were launched in 2000 and expire this year. The MDGs have been one of the most successful tools to focus international attention on poverty eradication, facilitating major gains on health and education in the lowest-income countries. UAE organisations like Dubai Cares, which supports children's and especially girls' education in 38 lower-income countries, have been prominent in the MDG agenda. The SDGs will also stress poverty eradication, but they are designed to cover a greater spectrum of development issues. New focus areas include energy, water, peace and social inclusion, climate change, ocean management, agriculture, and sustainable industrialisation, among others. There are 17 SDGs with 169 underpinning targets vs. 8 MDGs with 21 targets. Importantly, the SDGs will apply to all countries, not poor countries alone. – Emirates News Agency, WAM - http://www.wam.ae/en/news/emirates/1395283948434.html

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OFID: UAE is on track towards reaching MDGs on time


posted on 04/08/2015

Vienna: UAE's Economic Vision 2030, a robust capital spending plan on education, healthcare, industry, tourism, infrastructure, and renewable energy projects, generated Millennium Development Goals (MDG) progress and put the country on track towards reaching most of the MDGs on time, according to the annual report of the Opec Fund for International Development (OFID) for 2014.
The report, issued yesterday, said the UAE's GDP in 2014 was supported mainly by its perceived safe-haven status amid regional instability, its tourism and hospitality sectors, and a rebounding real estate sector.
'The sovereign wealth fund buffers help the country to enjoy lower fiscal breakeven oil prices, allowing it to continue on its path of gradual fiscal consolidation. The current account surplus narrowed due to lower oil prices but remained at a healthy level of 11.1% of GDP. The banking system continued to be well-capitalised and the rate of non-performing loans declined,' the report noted.
In the report's forward, Suleiman Jasir Al-Herbish, OFID Director-General, said,' By the end of 2014, cumulative commitments had climbed to almost US$18bn, following a record US$1,553m in approvals during the year. Disbursements also hit a new high of US$1,331m. These figures are not only immensely satisfying in themselves but also a powerful testament to the success of our various restructuring programs and our desire to do more.' 'Operations throughout 2014 continued to be led by our strategic focus on the vitally important water-food-energy nexus. With the global population expected to reach nine billion by 2050, these three areas sustainable water access, modern energy access and food security represent the defining challenges of this century.' OFID, he added, has made clear its readiness to mobilise all means at its disposal to address these issues and, in 2014, allocated US$823m or 53% of total approvals to nexus-related initiatives. Within the nexus, support to the agriculture sector leapt to four times the sum committed in 2013, bringing it close to par with the water and sanitation sector. Predictably, however, it was the energy sector that drew the bulk of approvals, with a record US$456m given in support of 29 projects in 24 partner countries.
'In keeping with our Energy for the Poor initiative and the spirit of our 2012 Ministerial Declaration on Energy Poverty, all financing mechanisms were brought into play to facilitate the broadest possible range of solutions.
Of particular note was the increased share going to renewables, particularly through the private sector window, whose 2014 portfolio was heavily pro-renewables and included, among other ground-breaking projects, two prize-winning solar installations in Jordan. Renewable solutions also featured strongly in the record US$5.9m approved under the grant-financed energy poverty program.' Among all the financing windows, the public sector maintained its position as the central pillar of OFID's operations, drawing 65% of total commitments for the year. The funds supported 41 projects in 34 countries and included a maiden public sector project in Argentina.
'Resources channelled through the grant program totalled US$25m and helped support over 60 initiatives, the majority of them at community level. Although they represent just a fraction of our commitments, we consider grant financed projects to represent the very essence of our mission. Efficient and quick at delivering results, they are in their own right an important instrument of development. In 2014 alone, in addition to the new funding, we were able to successfully complete 67 previously approved grant-financed projects benefiting 50 countries,' he concluded.
According to the report, the social and economic performance of OFID Member Countries in 20141 continued to be influenced by the international oil market, as well as the slow recovery of the world economy and, to some extent, by other socio-political issues.
Despite growing by 3.3% in 2014, the world economy continued to address the legacy of the global financial crisis, including debt overhangs and high unemployment. The volume of world trade contracted to 3.1%, from 3.4% in 2013, largely as a result of the deceleration in global activity, slower expansion in Latin America, a sharper first quarter inventory correction in the United States, as well as the impact of the Ukrainian conflict in Russia and neighbouring countries. Advanced economies grew at 1.8%, up from 1.3% in 2013, mainly due to better performance from the USA, the UK and Germany. Emerging and developing economies on the other hand did not fare as well, with GDP dropping three percentage points to 4.4%.
OPEC continued to contribute to the world oil supply by producing 30 million barrels per day (mb/d) in 2014, a decline of 167,000 barrels per day from 2013. World oil demand increased by 1 mb/d in 2014 to 91.2 mb/d, where the incremental demand was met by non-OPEC supply. Oil prices took a nosedive in the second half of 2014, going from US$100 per barrel in June to just over US$50 per barrel at the end of the year. This was partly as a result of new oil sources from North America increasing the global supply, OPEC's November decision to maintain current output, and a general slowing of oil demand in China and other developed countries because of the uncertain economy. The oversupplied market led the commercial OECD oil stock to reach around 100 million barrels higher than the latest five-year average in November 2014. The value of the OPEC reference basket of selected crudes averaged US$96.29 per barrel in 2014, a decline of US$9.58 from the previous year.
OFID Member Country governments remain committed to making further headway towards sustainable, inclusive, and diversified growth and improving social outcomes, including achievement of the MDGs. Although the plunge in oil revenues has confronted economies with constraints, positive growth rates, increased fiscal spending, and new pledges of financial assistance have had positive spillover effects. For example, trade and financial linkages, including demand for imports, outward remittance and foreign direct investment, have had a constructive impact at both the regional and global levels. – Emirates News Agency, WAM - http://www.wam.ae/en/news/emirates/1395283961097.html

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DCCI registers 8,830 new companies in H1


posted on 03/08/2015

In the first half of 2014, the Dubai Chamber of Commerce and Industry (DCCI) has registered a substantial growth in its membership base, which the non-profit business facilitator accredits to Dubai's rising profile as a sound business destination and its attractiveness to global investors.
Between January and June, a total of 8,830 new companies joined Dubai Chamber, which can be attributed to a record number of 335 international delegation visits to the Chamber. This brought the total number of members to over 177,000. These numbers, according to a recent report on the Chamber's half-year activities, strengthened the organisation's position as one of the largest chambers of commerce in the Middle East and North Africa (Mena) region
Also, as part of its global expansion strategy in emerging markets of the world, Dubai Chamber opened its fourth international representative office in the city of Accra in Ghana and is preparing to open another two in Mozambique and Brazil soon, with the aim to open new market opportunities for its members.
Hamad Buamim, President and CEO, Dubai Chamber, said that when these international delegations come to Dubai, the Chamber highlights the advantages of doing business in Dubai and the attractive investment climate it offers. This is a crucial reason for the 8,800 new members in H1, 2015. "This rising trend in the Emirate's international profile as a leading centre of trade and finance and the global investors' confidence in Dubai's lucrative economic sectors, which are led by trade, logistics, tourism and finance, are behind the foreign companies' desire to set up base in Dubai and expand their global business activities through the Emirate,” explained Buamim.
According to Buamim, the Chamber members' half-yearly exports and re-exports reached Dhs151 billion, which reflect the robustness of the Emirate's business activities and the Chamber members' eagerness to expand and explore new markets as the membership has reached 177,000 with the members coming from 189 countries.
The rise in the new membership is expected to reach 15,000 by the end of the year, he added. Dubai Chamber's half year data shows that its members' exports and re-exports between January and June 2015 were worth Dhs151 billion compared to Dhs149 billion during the same period in 2014.
Meanwhile, the monthly total of March 2015 was the highest with Dhs28.1 billion with January registering the lowest with a value of Dhs22.6 billion.
During the same period, Dubai Chamber issued a total of 470,000 certificates of origin (COOs), compared to 445,000 COOs issued in the first half of 2014, leading to a 5.4 per cent increase. March saw the highest number of COOs issued at 85,000 with January being the slowest month at 69,000.
Dubai Chamber's half year figures also show that during this time the organisation received 355 international delegations, comprised of 1,200 delegates, including government officials and businessmen, showing a 228 per cent growth in the number of visiting delegations and a 109 per cent growth in the number of delegates compared to the same period in 2014.
At the same time, Dubai Chamber participated in 36 events around the world, in 27 cities in 24 countries, including the US, UK, France, Italy, Argentina, Belgium, Brazil, Czech Republic, Russia, Rwanda and Uganda and others, with the objective of promoting Dubai. – The Gulf Today - http://gulftoday.ae/portal/7e0a6db5-9a64-47a9-b171-8983eaf37f56.aspx

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Economic Performance of the Emirate of Abu Dhabi Follow-up Report Q1, 2015


posted on 02/08/2015

Ali Majid Al-Mansouri, Chairman of the Department of Economic Development (DED) Abu Dhabi, has said that the local economy of the Emirate of Abu Dhabi has recorded new overall economic growth levels last year registering noticeable improvement in the non-oil sectors performance and showing a real growth of the GDP at 5.8% in the first quarter of 2014.
On the occasion of the issuance of the "Economic Performance of the Emirate of Abu Dhabi Follow-Up Report" by the Economic Development Department of Abu Dhabi, he said that there has been an improvement of performance based on development indicators on macro and sectors levels in several non-oil sectors such as the real estate, banking and tourism sectors.
The First Quarter Economic Performance Report of Abu Dhabi for this year, issued by the Department in cooperation with the National Bureau of Statistics of Abu Dhabi , included the results of the Consumers Trust Index in reference to the economic performance, National Family Conditions Observatory Index, General Index of Confidence in Business Climate and the Business Cycle Performance Indicators, in addition to the inflation in the Emirate of Abu Dhabi, accented by a futuristic look upon the Economy of the Emirate of Abu Dhabi.
Ali Majid Al-Masouri clarified that the results of the development indicators during the first quarter (Q1) of this year showed improvements in the levels of trust among consumers and business establishments in reference to the economic situation at the Emirate; these findings were based on positive assessments of the current situation and optimistic expectations of the future.
He added that despite the impact of the oil sector, in reference to the advancements witnessed worldwide in oil markets, and the impact on the Business Cycle Performance Indicators as a result of lowering oil prices, these indicators became reflective of the sturdy economy of the Abu Dhabi Emirate in light of the current and prevailing policies, which have been able to absorb all negative shocks and protect the consumer and the investor from them, particularly in non-oil sectors, while looking into the possibility of converting them into opportunities to empower the economic diversity in the Emirate.
He mentioned that the economic performance of the United Arab Emirates State has been good in non-oil sectors, during the first quarter (Q1) of 2015 according to the report results, and many sector indicators; whereas the overall State economic performance, as is the case with the rest of the oil-exporting countries, was affected by the international oil markets developments.
The Standard and Poor's Agency affirmed that the credit quality classification of the Emirate of Abu Dhabi was "AA+" level, and ruled out any effect of the current oil prices on the development projects that are being carried in Abu Dhabi.
Khalifah Ben Salem Al-Mansouri, Vice-Chairman of the Department of Economic Development (DED), added that the overall results are reflecting a continuity of good economic performance, particularly by the non-oil sectors, based on ascending levels of the General Index of Confidence in Business Climate, Consumers Trust Index and the National Family Conditions Observatory Index.
He also commended this performance despite the impact of the international oil markets developments, over the economy of the Emirate, and many other economies in the area, amid fears that it would impact the oil-exporting countries.
He clarified that the main General Index of Confidence in Business Climate, and its sub-indicators for Q1 2015 portray the optimism of businessmen and investors, and the rise of their trust in the business environment in the Emirate, in comparison with the same first quarter of last year, 2014.
This optimism, he added, has included economic establishments that are working in different activities across the Emirate, since the Main Consumers Trust Index indicators and sub-indicators of Q1 2015, have increased to levels of optimism amidst consumers of different characteristics, demographics and social backgrounds, denoted by their positive assessments of the current situation and their optimism towards the future.
The Vice-Chairman said the results of the National Family Conditions Observatory Index, during the above-mentioned Quarter, show that the trends and patterns of consumption among most national families have not been affected by the rise in prices, in addition to the retreat in the number of borrowers from national heads of households, as a reflection of success of efforts to rationalise consumer behaviour and borrowing.
On the contrary to all other indicators, he continued, as expected, the Business Cycle Performance Indicator reflects the impact of turbulences in international oil markets on the Emirate oil sector economy during Q1 2015, vividly seen in this report, and the detailed development indicators results of Abu Dhabi Emirate for Q1 2015.
He mentioned that the National Bureau of Statistics of Abu Dhabi estimates show that the GDP of the Emirate registered real growth at an annual average of 5.8% (Q1 2014) in comparison to 3.1% (Q1 2013) and 5.4% (Q4 2013).
Adding, that the average annual growth of the non-oil activities added values rose noticeably in the above-mentioned quarter reaching 12.7% in comparison to 2.6% in the same quarter of 2013, while oil activities added values retreated by -0.3% (Q1 2014) due to a decrease in oil prices and some retreat in the produced quantities.
Khalifah Al-Mansouri pointed out the steady rise in the average non-oil GDP growth, given efforts to diversify the local economy structure in the Emirates; so that the relative participation of the non-oil sector in the GDP of the Abu Dhabi rose to 50.4% (Q1 2014) versus 49.6% for the oil-sector.
He elaborated on the huge opportunity before Abu Dhabi given the features it enjoys, to take advantage of the international oil markets situation, and empower the performance of non-oil sectors to anchor economic diversity and compensate the losses due to decreased oil prices, on the short term, and to achieve the economic vision of Abu Dhabi 2003 on the long term.
He also pointed out that the Report shows improvements in the performance indicators of several non-oil sectors, within the Abu Dhabi economies (2015).
Rashed Ali Al-Za'abi, the Deputy Executive Director of the Planning and Statistics Sector, at the Department said, that the sector indicators (Q1 2015) reflect a strong economy of Abu Dhabi, and its ability to absorb the fears related to international oil markets developments, and adapt to these emerging changes.
He said the tourism sector shows recent data issued by the Abu Dhabi Tourism and Culture Authority that reflect improved sector performance (Q1 2015), as the number of hotel guests increased by 20% (Q1 2015) in comparison to Q1 2014, and reached more than one million guests.
He added the number of hotel room-nights in Abu Dhabi increased by 11% to about 2.9 million room-nights, hence a rise in the gross income of the hospitality establishments by about 14% reaching 1.8 billion Dirhams (Q1 2015). Occupancy reached 79% (Q1 2015) at no real change from Q1 2014.
The real estate sector, Al-Za'abi added, which was also monitored by the Report, showed a rise in rentals of housing estates by 4% (Q1 2015) in comparison to Q1 2014, with some retreat registered by Q4 2014.
This comes at a time the market is witnessing an increase in the supply, where housing units in the Emirate reached about 244,000 units (Q1 2015) hence reflecting a strong demand for housing units.
He added, that the office units rentals were more steady (Q1 2015), despite differences within these units, as some were "Class A" whose rentals increased, and "Class B" whose rentals were more steady, so was the case for retail stores that were also steady despite the increase in shop rentals outside the Island of Abu Dhabi.
Rashed Al-Za'abi mentioned that the overall market performance reflects stability despite the real estate units supply, on the one hand, and the increase in demand over all types of units, on the other hand. A corrective action was detected in rentals, which is expected to lead to market stability and sustainability in the sector performance on the medium term.
As for Abu Dhabi external trade of non-oil goods, Za'abi said that according to the published data, the gross amount of non-oil goods value reached 13.7 billion Dirhams (February 2015), registering a 16.8% increase compared to February of the year before.
This resulted from the rise in imports by 18.1% reaching Dh 9.8 billion, and exports by 18.8% reaching Dh 1.4 billion, he added.
He continued: "We notice a retreat in the gross value of foreign trade (Feb. 2015) compared to last year (Jan. 2014), due to the retreat in non-oil commodities that are re-exported, and decrease in imports of non-oil foreign trade (Jan. 2015) compared to same month the year before". The contributions of non-oil commodities exports from the gross foreign trade amount reached 18.2% (Feb. 2015).
One of the most important banking and financial developments, as Rashed Al-Za'abi, the Deputy Executive Director of the Planning and Statistics Sector at the Department said, was the good performance of the banking sector (Q1 2014) as the aggregate profits of Abu Dhabi's five listed banks in the Abu Dhabi Securities Exchange were 5.2 billion Dirhams (Q1 2015) at an increase of about 8.6% in comparison with those in the same quarter of 2014.
He pointed out that citizens own most of the shares in the Emirate of Abu Dhabi, so their owned shares by the end of March 2015 were 83% versus 17% to non-citizens.
According to the Economic Performance Report, the working banks assets grew by 9.1% (Q1 2015) compared to Q1 2014, reaching 2.38 trillion Dirhams (Mar. 2015), while the total solvency capital percentage stabilised in Q1 2015, and equated that of Q4 2014 at 18.2%.
It's worthwhile saying that the percentage is above the limits set by the Central Bank, hence reiterating the ability of working banks in Abu Dhabi to bear the burden of building additional allocations to meet the development in loans and lending, granted by these banks.
The total customers' deposits (residents and non-residents) at the working banks in the State rose by 8.8% (Q1 2015) reaching 1.45 trillion Dirhams, in comparison with 1.33 trillion Dirhams (Q1 2014).
There was an increase in the size of Certificates of Deposits at the Central Bank, coupled with the rise in liquidity in the market (Q1 2015) that reached 111.7 billion Dirhams (Mar. 2015) versus 99.5 billion Dirhams (Dec. 2014), at a retreat of about 6.2% on annual basis.
The General Financial Indicator of Abu Dhabi market ended with a retreat (Q1 2015) as a result of the retreat of some vital sectors like energy, real estate, and banks. The indicator decreased by 1.35% versus loss at 11.31% (Q4 2014), losing 61 points on the Index, closing the market at 4467.93 points (Mar. 2015).
This has been attributed to many reasons that led to the retreat of the financial market / Abu Dhabi Securities Exchange, namely the successive decline in oil prices since the beginning of the second half of 2014, where the price of the crude (Miban) oil declined from 111.65 US$/Barrel (Jun. 2014) to its lowest level of 46.40 US$/Barrel (Jan. 2015), that had not been witnessed (i.e. lowest level) since March 2009, at the time of the world economic crisis, when numerous companies delayed declarations of their financial status.
The services sector comes in the first place, in terms of citizens' shares ownership, at 97.5%, followed by the insurance sector at 96.1% and then the consumers' goods sector at 89.7%. However, data is showing the increasing interests among non-nationals (expatriates) to investment and buy shares in the electronic fund, debt tools, and energy at 52.1%, 35.8% and 32.9% respectively.
As per issued data from the Abu Dhabi Securities Exchange, the most buy-sell shares operations were performed by citizens, reaching 55.19% and 54.48% respectively, as for non-citizens, the percentages were 44.81% and 45.52% respectively.
Individuals led the way with the largest volume of trading (Q1 2015) reaching 3,974,325,684 in buying shares at 71.3% of the gross total of the buying transactions and 4,103,683,049 in selling shares at 73.6% of the gross total of selling transactions. The remaining percentages corresponded to total companies trading of 28.7% and 26.4% respectively.
The Report covered the Consumers Trust Index in the UAE. It is part of Nielsen's Consumer Confidence Index (CCI), so that the confidence of the consumer in the State was noticeably higher (Q4 2014) at 114 points compared to 112 points (Q3 2014).
The consumers in the UAE were found to be more trusting and optimistic, at the end of 2014 on the level of the Middle East Countries, covered by the Nielsen's Consumer Confidence Index (CCI), hence reflecting the continuity of the trust of consumers in the economic status in the State, despite recent international oil markets development, and retreat in oil prices during the second half of 2014.
The United Arab Emirates ranked the first among Arab Countries, and ranked in the 20th position internationally on the Happiness Index (2015) issued by the UN Sustainable Development Solutions Network (SDSN). The Index covers 158 country and is based on a group of main and sub-indicators related to the quality of health, the individual's share of the GDP, social support and trust (extent of corruption decline among public institutions and the business sector), in addition to the individuals' freedoms.
The International Monitory Fund (IMF) estimated the average economic growth of the Emirates at 3.6% (2014), and expects 3.2% in 2015, among the highest in the area.
Most recent published data by the National Bureau of Statistics of Abu Dhabi show that the gross total of the foreign trade of non-oil goods, of the UAE was 524.8 Billion Dirhams, during the first half of 2014. The imports amounted to 64.8% of the gross (above-mentioned) amount, and exports of non-oil commodities amounted 12.1%, and the re-exported stood at 23.1%.
Financially, the IMF expects a retreat from 12.1% of the GDP of the surplus of current balance, in the UAE in 2014 to about 5.3% in 2015, due to the decline in the international oil prices.
The records of the Ministry of Finance show that the actual performance of the budget over the first nine months of 2014 realised a surplus of 4.1 billion Dirhams amounting to 10.4% of the gross revenue during that period.
For banking and financial developments, and as per the figures of the Central Bank of the UAE, the monetary supply (N3), in the broad scene was 1377.2 billion Dirhams, end of March 2015, reflecting a rise of 1.2% over end of February 2015 figures of 1361.3 billion Dirhams. The gross bank deposit totalled 1.3%, end of March 2015, in comparison to February figures, hence reaching 1449.3 billion Dirhams. Meanwhile the total bank credit rose to 1410.2 billion Dirhams, end of March, at 1.2% compared to February. In local markets, and as per the data of the Abu Dhabi Securities & Commodities Authorities, the shares price index registered 4476.9 points, end of March, retreating by 2.3% compared to December 2014.
The IMF is expecting a retreat in the average inflation, on the general prices level, to about 2.1% (2015) compared to 2.3% (2014), where it registered record consumer prices in the State at about 124.7 points (Mar. 2015) as per the Consumer Price Index in the UAE Report, issued by the National Bureau of Statistics of Abu Dhabi.
This lead to an increase in the average annual inflation on State level, registering about 4.3% (Mar. 2015), so that the average inflation rate rose to about 3.9%, on average (Q1 2015). Observers are expecting a retreat in the average of inflation, amidst corrective measures on the level of real estate rentals. – Emirates News Agency, WAM - http://www.wam.ae/en/news/emirates/1395283875956.html

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Ministry of Economy discusses cooperation with JETRO


posted on 29/07/2015

Juma Mohammed Al Kit, Assistant Under-Secretary of UAE Ministry of Economy for Foreign Trade, has discussed with a delegation from the Central Office of Japan External Trade Organisation, JETRO, in a meeting held at the Ministry's headquarters in Abu Dhabi, ways to enhance trade and investment relations and promote communication between the business community in the two countries.
The Japanese delegation included Masayoshi Watanabe, the former Managing Director of JETRO Dubai & MENA, the Central Office of Japan External Trade Organisation (JETRO) for the Middle East and North Africa Region, and Masami, who will be the new Director of the Regional Office in Dubai.
Al Kit commended the distinguished efforts of Watanabe during his tenure in Dubai that contributed to the development of trade and investment relations between the UAE and Japan, which saw remarkable developments during the past period.
He stressed the UAE's keenness to strengthen the partnership with Japan by working to increase trade exchange and investment cooperation and focus on the importance of the role played by the private sector in promoting the trade exchange between them.
Al Kit said that the relationship between the UAE and Japan witnessed significant developments over the past few years, citing that Japan is among the top five trade partners of the UAE and the volume of the non-oil trade touched $14 billion dollars at the end of 2014. The figures reflect the depth and strong commercial relationship between the two countries.
He called on the Japanese side to intensify the presence of the Japanese private sector in various trade and investment events, which are held in the country. They provide an opportunity to meet with investors from around the world to discuss the areas of partnership, cooperation and investment.
For his part, the Japanese official praised the level of relations between the two friendly countries and the efforts of sustainable development in the UAE, noting the keenness of the Government of Japan to promote trade and investment cooperation with the UAE. He also underlined the importance of development of communication and cooperation between the public and private sectors of the two sides to enhance trade and investment relations. – Emirates News Agency, WAM - http://www.wam.ae/en/news/economics/1395283756201.html

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Ministry of Economy updates UAE 2014 Trade Statistics App as part of smart data services drive


posted on 28/07/2015

The Ministry of Economy yesterday announced it has updated the UAE trade figures app up to the end of 2014, as part of its renewed focus on providing smart data services to residents and citizens of the country. The trade statistics application can be found on the ministry's official website (http://www.economy.ae).
The step is in line with the ‘smart' directives of the UAE leadership that has urged the federal government to further reach out to the public through the regular launch of innovative services and continued updating of various apps and e-services. The trade statistics application is an important tool for individuals, businesses and public institutions for obtaining up-to-date numbers that are crucial to all trade transactions in the current business landscape.
Abdullah Al Saleh, Under-Secretary of the Ministry of Economy for Foreign Trade and Industry, said: "In line with the federal government directives, the Ministry of Economy is working to achieve the highest level of transparency and competitiveness. The current update fulfils a long-perceived need for recent and relevant information in the trading sector.
"With the help of the economic experts at the Ministry, we have revised the trade statistics application to include all data and information gathered up to the end of 2014. We are keen to provide an integrated IT platform that will help investors and businessmen in the UAE plan out their economic and investment policies and strategies for the wider benefit of the country and its trade with global partners."
Al Saleh pointed out that application is the first-of-its-kind in the region to display trade data in an extremely interactive, user-friendly and dynamic manner. The app also helps save time and effort with its ability to make a number of comparisons based on different time periods, geographical areas, and types of commodities.
The Under-Secretary also shared that in addition to the updated 2014 trade statistics, the revisions also included comprehensive data on commodity flows for non-oil goods, as well as exports, re-exports and imports of the UAE with more than 220 countries extending from 1999 until 2014. Furthermore, the information can be easily extracted and exported to various desktop applications such as the MS Office suite of Excel and Word, as well as the PDF format, among others.
Notably, the application was first launched in 2010 to provide a modern and user-friendly platform for foreign trade statistics. The number of application users every month currently averages between 1,000 and 1,500 from the UAE and several other countries globally, including India, Brazil, the US, China, Saudi Arabia, Switzerland, and Italy. – Emirates News Agency, WAM - http://www.wam.ae/en/news/economics/1395283689997.html

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UAE to remain on growth trajectory


posted on 24/07/2015

The UAE economy, less vulnerable to oil price fluctuations than its GCC peers, will stay on the growth trajectory in 2015 on the back of brisk diversification and increased government spending as inflation tends to drop to 3.3 per cent on expectation of sustained softening of rents.
Focus Economics panellists expect the Arab world's second largest economy to grow 3.5 per cent in 2015, which is up 0.1 percentage points from June estimate. For 2016, the panel projects a gross domestic product (GDP) growth of 3.6 per cent, and foresees inflation to average 2.8 per cent.
In 2014, UAE's economy posted yet another robust growth rate by expanding 4.6, an improvement over the 4.3 per cent expansion recorded in 2013.
"Diversification of the UAE's economy has made it less vulnerable to oil price fluctuations compared to its regional peers. 2014's expansion came on the back of an improvement in exports and government spending, while private consumption was lacklustre," Focus Economics analysts said.
The upbeat forecast was based on economic data from the second quarter which shows that business conditions in the UAE's non-oil private-sector economy continued to improve. Although the purchasing managers' index, or PMI, inched down in June, the rate of business expansion remains strong.
In sum, the UAE is set to continue to perform strongly in 2015 in the backdrop of a favourable business environment as well as an increase in government spending, they argued.
In May, inflation was stable at April's 4.3 per cent and thus remained at an over five-year high. "The upward trend in inflation that has been observed lately reflects an increase in housing costs. However, looking forward, panellists see inflation dropping to 3.3 per cent on expectations that real estate prices and rents will ease this year. Next year, the panel foresees inflation to average 2.8 per cent."
The expansion of UAE's economy in 2014 came on the back of an improvement in the external sector, while domestic demand deteriorated over the previous year. Private consumption swung from a six per cent increase in 2013 to a 0.3 per cent decrease in 2014, while growth in government spending accelerated from 1.4 per cent in 2013 to 3.7 per cent in 2014.
Fixed investment recorded a 3.6 per cent expansion, which was significantly down from the 8.3 per cent increase observed in the previous year.
"On the external side of the economy, exports expanded 8.2 per cent in 2014, which marked a significant improvement over the 4.5 per cent increase seen in 2013," they said.
In contrast, growth in imports dropped from 6.5 per cent in 2013 to 6.1 per cent in 2014. The government expects the economy to expand between 4.0 per cent and 4.5 per cent in 2015.
According to Focus Economics, growth in the Middle East North Africa, or Mena, region is expected to accelerate to 3.4 per cent in 2016, which is unchanged from the previous month's estimate.
Qatar is expected to be the best performer in 2015, followed by Morocco, the panelists said.
Among the major economies, along with the UAE, Egypt will likely grow the fastest, with a projected expansion of 4.0 per cent. At the other end of the spectrum, Iran and Yemen are expected to be the worst performers. – Khaleej Times - http://www.khaleejtimes.com/business/economy/uae-to-remain-on-growth-trajectory

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ADDED Chairman: UAE Economic Planning Forum 2015 represents common vision of economic development departments and Economy Ministry


posted on 21/07/2015

Ali Majed Al Mansoori, Chairman of the Abu Dhabi Department of Economic Development, ADDED, has said that the second edition of the UAE Economic Planning Forum that will be held in Ras al-Khaimah represents the common vision shared by the departments of economic development, the Ministry of Economy and relevant entities, to reflect the objectives and foundations of the Government's Strategic Plan for 2021.
In a statement delivered on the occasion of the forum's launch on the 7th of October 2015 under the patronage of H.H. Sheikh Saud bin Saqr Al Qasimi, Supreme Council Member and Ruler of Ras al-Khaimah, Al Mansoori said that ADDED is keen on guaranteeing the success of this important yearly event by strengthening common collaboration and integration between the Ministry of Economy and local departments of economic development in order to achieve the forum's objectives and reflect the role of each contributing entity in achieving sustainable economic development for the state in all fields.
He also pointed out the importance of this year's forum that constitutes a prominent step to following up on the outcomes of the forum's first edition, held in Fujairah. The second edition is also an important extension that guarantees communication between all departments of economic development in the country. It is an event where all the concerned bodies can discuss and consider all issues pertaining to the strategic economic plans of each emirate, in order to unify goals and common efforts.
The ADDED Chairman highlighted the great success achieved by the forum's first edition, which was held under the patronage of H.H. Sheikh Hamad bin Mohammed Al Sharqi, Supreme Council Member and Ruler of Fujairah. The support received by the forum reflects the great interest of the UAE government and local departments in all emirates in achieving the forum's objectives aimed at guaranteeing integrity in economic planning, implementing development projects and strengthening the economic status of the state both regionally and internationally.
Mr Al Mansoori said that the second edition is to focus on innovation and creativity to build a diversified and sustainable economy that can cope with the state's wise directions and its ambitious strategy. This would contribute to the creation of an investment environment that attracts foreign investments and leads to the transfer and nation-wide adoption of technology.
He expressed his appreciation of the efforts of the Department of Economic Development of Ras al-Khaimah for hosting this year's edition and sparing no effort to guarantee the success of the event. The UAE Economic Planning Forum constitutes a common platform for all participating state-linked stakeholders that would gather to propose initiatives, ideas, projects and ambitious plans based on creativity and innovation.
Rashed Ali Al Zaabi, Executive Director of the Planning and Statistics Sector of ADDED, said that the common goal of all stakeholders engaged in achieving the UAE government's strategic plan was the serious pursuit of opportunities and incentives, recognising the challenges present in the ever-changing local and international work environment, finding the necessary innovative and creative solutions in order to advance the path of development, and increasing the state's competitiveness both regionally and internationally.
Al Zaabi pointed out that the items on the agenda of the second edition of the UAE Economic Planning Forum focus on the qualitative experiences of each emirate in order to share knowledge to support and strengthen the national economy. This would be reflected in the strong integrity and active communication between all the stakeholders that are working in the field of economic development at the state level in order to build a common ground to prepare future plans, strategies and visions. – Emirates News Agency, WAM –http://www.wam.ae/en/news/general/1395283491062.html

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Abu Dhabi makes big strides in diversifying economy as oil price remains low


posted on 21/07/2015

As Gulf economies take stock of continuing oil price turbulence, the Abu Dhabi government is boosting investments in the industrial and petrochemical sector to diversify income from fossil-fuel energy.
From petrochemical projects to defence industries, the UAE has made strides in becoming one of the most non-oil dependent economies in the region.
"The UAE is one of the most diversified economies of the region and ranks favourably on competitiveness indicators,” the IMF says. "Structural reforms should aim at further diversifying the economy and accelerating private sector-led job creation for nationals.”
The industrialisation efforts are part of Abu Dhabi's 2030 Vision, which counts on non-oil industries to play a significant role in supporting the economy.
As part of Abu Dhabi's Economic Vision 2030, the contribution of the non-oil sector is aimed to be 64 per cent of GDP. In 2013, non-oil activities contributed 45 per cent to the emirate's GDP, versus 43 per cent in 2012, according to the Economic Report of the Emirate of Abu Dhabi 2014.
The manufacturing industries sector in Abu Dhabi accounted for 12.6 per cent of the emirate's non-oil GDP in 2013.
Petrochemicals and plastics remain the top manufacturing sector, accounting for about half of the manufacturing industries' production and 73 per cent of its fixed capital formation. It is followed by the basic metal industries (iron and aluminium), which account for 11 per cent of the production value of manufacturing industries sector.
"Dubai has been traditionally the leader of the diversification effort, but Abu Dhabi has found its own competitive niches in different segments and it is natural to focus on the non-oil sector in the current period of low oil prices,” says Razan Nasser, a senior economist at HSBC Middle East.
For example, the plastics firm Borouge plans to reach a petrochemical production capacity of 4.5 million tonnes a year by 2016 as the country's biggest petchems producer undertakes a US$4.5 billion expansion despite the oil price rout. Borouge 3, which had an initial start last year, will increase output to 4 million tonnes of petrochemicals a year by the end of this year from the current level of more than 2 million tonnes per year. Abu Dhabi-based Borouge is a joint venture between state-run energy firm Abu Dhabi National Oil Company and Austria's petrochemical company Borealis.
Meanwhile, the state-owned Emirates Global Aluminium (EGA) is spending $5.2bn to boost capacity at its smelter in Dubai and build an alumina refinery in Abu Dhabi. EGA, the world's fifth-largest aluminium producer, was formed last year by the merger of Dubai Aluminium (Dubal) and Abu Dhabi's Emirates Aluminium (Emal).
EGA is adding about 40,000 tonnes per year to the 1 million tonnes per year smelter plant at Dubai due for start-up in 2017 and it is building a 2.2 million tonnes per year alumina refinery in Al Taweelah in Abu Dhabi set for start-up in the first quarter of 2018.
All of these expansion projects at EGA, which reached a capacity of 2.4 million tonnes per year last year, are part of plans to become the fourth-largest aluminium producer globally in the next two to three years.
"Currently, projects in chemicals, plastics and related products dominate manufacturing value added in Abu Dhabi. These are oil-related [petrochem] and energy intensive,” says Dima Jardaneh, an economist and director of research at investment bank EFG-Hermes in Dubai. "To more effectively diversify the manufacturing sector away from oil, there needs to be an emphasis on projects that are not oil-related.
"I believe that Abu Dhabi plans to expand efforts in this direction. For example, manufacturing clusters around basic metals, the aerospace industry, and health and pharma, albeit these efforts are still at early stages.”
Abu Dhabi has also been keen to develop the aerospace efforts and defines the industry as part of its Vision 2030. At this year's edition of the International Defence Exhibition (Idex) in Abu Dhabi a large portion of deals went to UAE-based defence companies as part of government plans to carve up a local industry and create jobs for nationals. The newly-formed Emirates Defence Industries Company, Tawazun and Abu Dhabi Ship Building were among the local winners awarded contracts alongside foreign firms such as the US-based Boeing, Europe's Airbus Defence, and the French-Italian aerospace manufacturer Thales Alenia Space.
Strata, a company owned by strategic investment company Mubadala, will make parts worth $80 million for Airbus this year and is expected to eventually produce composite parts for the A350 and A320.
Al Ain-based Strata, which also manufactures parts for Airbus's rival Boeing, won deals with the two plane makers worth $5bn to make parts for their aircraft at the Dubai air show in 2013.
At the Khalifa Industrial Zone, where Emal and other industries are based, there are a number of projects that will support diversification efforts.
Abu Dhabi Ports this year signed an agreement with a unit of FourWinds Group to build a steel foundry to produce car parts at the capital's Kizad free zone, with Germany's car parts maker Continental Teves agreeing to buy the full output of the first production line.
The Abu Dhabi-based Senaat conglomerate is developing a Dh1.1bn steel plant that will create 370 jobs in Kizad through a joint venture with two Japanese steel makers, JFE Steel and Marubeni-Itochu Steel.
"With the introduction of Abu Dhabi Vision 2030, the AD government is in pursuit of economic diversification and sustainable growth,” says Alp Eke, senior economist at National Bank of Abu Dhabi.
"In my opinion AD is on the right track and is able to reach ambitious goals of Vision 2030 with projects like Khalifa Industrial Zone, Abu Dhabi Midfield Terminal, and Etihad Rail,” Mr Eke says.
"These projects will reduce reliance on oil sector, facilitate trade and transportation, will boost activity, enable direct and indirect economic growth.” – The National - http://www.thenational.ae/business/economy/abu-dhabi-makes-big-strides-in-diversifying-economy-as-oil-price-remains-low#full

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Mohammed bin Rashid: We achieved the first goal of Dubai's plan to become world's capital of Islamic economy


posted on 09/07/2015

Vice President and Prime Minister and Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Wednesday said that the first goal of the strategy launched two years ago to develop and promote Dubai as the global capital of Islamic economy has been achieved.
H.H. Sheikh Mohammed hailed the achievement made by Dubai as it has overtaken other financial centres in listing Islamic bonds on its exchanges. Sukuk listed on Dubai's exchanges, rose to Dh135 billion in 2015, said a recent study published by Thomson Reuters.
Sheikh Mohammed bin Rashid made these remarks as he chaired a meeting of the board of directors of Dubai Islamic Economy Development Centre.
"When we launched our plan to become the world's capital of Islamic economy two years ago, some brothers had doubts. But today we have achieved the first goal even before the date we had set. We have a clear vision for our next achievement in 2020."
"Islamic finance is the most important sector of Islamic economy and Sukuk are one of the most important tools of this sector. Today we are the world's biggest centres for Sukuk, but our vision is even wider and more comprehensive as it takes in seven major sectors of Islamic economy," H.H. Sheikh Mohammed bin Rashid added.
"Thanks to its steady growth, increasing assets and straightforward principles, Islamic economy has become an established reality within the system of global economy. Through the huge economic opportunities provided by Islamic economy, and the massive partnerships that it can create, Islamic economy can provide a key to further stability and development in our region."
H.H. Sheikh Mohammed bin Rashid added, "We want an Islamic economy that has a global vision and local cadres to serve our national economic interests because the fast-paced global economic developments make it mandatory for us to quicken the pace of diversifying our national economy."
H.H. Sheikh Hamdan H.H. Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, who oversees the initiative to turn Dubai to the global capital of Islamic economy, attended the meeting and emphasised that Dubai will become the global reference for all forms of Islamic finance by 2020. "We have accumulated experience, a clear roadmap and strategic partners at home and overseas to carry out the directives of His Highness Sheikh Mohammed bin Rashid to make Dubai the benchmark for Islamic economy."
"Dubai's strategy for Islamic economy is achieving its goals. The plan to make Dubai the world's capital of Islamic economy includes not only Islamic products and financial tools but also Islamic commodities, services and knowledge. Several initiatives were launched for these sectors. Dubai Islamic Economy Development Centre will launch new initiatives in the coming period to accelerate action on the set plan," H.H. Sheikh Hamdan bin Rashid added.
Sukuk listed on Dubai's two exchanges, Nasdaq Dubai and Dubai Financial Market, rose to US$36.7 billion (Dh134.38 billion), according to Thomson Reuters data.
Nasdaq Dubai accounts for the substantial chunk of US$33 billion, while Dubai Financial Market accounts for US$2.75 billion.
This put Dubai ahead of the world's three traditional Sukuk centres: Malaysia, with US$26.6 billion listed on Bursa Malaysia and the Labuan free trade zone, the Irish Stock Exchange with US$25.7 billion, and the London Stock Exchange with US$25.1 billion.
Mohammed bin Abdullah Al Gergawi, Minister for Cabinet Affairs and Chairman of the Dubai Islamic Economy Development Centre, noted that the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, and the incessant follow-up by H.H. Sheikh Hamdan bin Mohammed bin Rashid, for turning Dubai into the global capital of Islamic economy, were effective in making this world-class achievement that has come three years ahead of the emirate's plan in which 2018 was the target year.
"We have an extensive and solid relationship with a wide range of international investors. We also have one of the world's best regulatory and procedural environments. We have a clear plan that is backed by all government departments. We expect action in all Islamic economic sectors to pick up speed in the coming period in line with the directives of H.H. Sheikh Mohammed bin Rashid to achieve the goals that we set in 2013, before 2020," Al Gergawi added. – Emirates News Agency, WAM – http://www.wam.ae/en/news/emirates/1395283064926.html

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UAE economy to grow at a healthy rate this year: Standard Chartered


posted on 08/07/2015

The UAE economy is expected to grow at a relatively healthy rate of 3.8 per cent in 2015, lower than the 2014 growth of 4.5 per cent, according to Standard Chartered' s Global Focus report.
While Dubai's tourism and retail sectors are expected to face a more challenging environment, the outlook for the its trade sector dynamics is improving as the hub for 55 per cent of the region's trade, Dubai benefits from ongoing trade flows as well as GCC countries continue to spend on their economies.
"We now estimate that Dubai's trade sector will grow by a more robust 7 per cent in 2015 (against our earlier projections of 4.5 per cent) as improving regional trade dynamics support trade flows through Dubai ports,” said Shady Shaher, an economist with Standard Chartered.
A combination of factors has impacted the outlook for Dubai's tourism and associated retail sectors. A slump in the number of Russian tourists and a drop in their spending has impacted both tourism and retail business. Data from Network International, a payments solutions provider shows that retail spending by Russians fell 52 per cent in the first quarter of this year.
"We believe the growth rate for tourism and associated retail sectors will drop to 4.2 per cent this year from almost 8.5 per cent in 2014,” said Shaher.
The UAE's hydrocarbon sector is largely centred in Abu Dhabi which controls 95 per cent of crude production and exports. Weaker oil prices mean reduced oil receipts contributing to weaker nominal growth impacting spending. But Opec data shows that the UAE is now producing almost 2.9 million barrels of oil per day against Standard Chartered's earlier forecast of 2.6 million barrels a day.
"Our outlook for Abu Dhabi government spending in 2015 has shifted. We now expect it to be maintained at or around similar levels of 2014,” said Shaher.
Latest inflation data shows Dubai's inflation rose to 4.2 per cent in April, near its five-year high while inflation in Abu Dhabi was at a 6-year high of 5.3 per cent. "Inflation is a key risk for 2015 growth. We view inflation numbers as a lagging indicator for cost of housing, which were slow to capture rising rents in 2015. We believe both rents and house prices to moderate this year,” he said. – Gulf News - http://gulfnews.com/business/economy/uae-economy-to-grow-at-a-healthy-rate-this-year-standard-chartered-1.1546761

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UAE non-oil private sector activity growth eases in June


posted on 06/07/2015

Non-oil private sector business activity growth in the UAE slowed to almost a two-year low in June on the back of slower output expansion and weaker growth in new orders, according to a survey released on Sunday.
The seasonally-adjusted Emirates NBD UAE Purchasing Managers' Index, which covers manufacturing and services, fell to 22-month low of 54.7 points in June from 56.4 in May. The 50-point level separates growth from contraction in the survey of 400 firms.
"Marked slowdowns in growth of output and new business were at the forefront of the overall deceleration, while employment continued to rise at a solid pace,” the survey report said.
The survey, sponsored by Emirates NBD and produced by Markit, contains original data collected from a monthly survey of business conditions in the UAE non-oil private sector.
Khatija Haque, head of Mena research at Emirates NBD, said although the June PMI data was the softest in two years, it signals solid growth in the non-oil private sector.
"Furthermore, it is difficult to determine whether the softening will continue into third quarter, particularly when bearing in mind the Islamic calendar. We attribute some of the slowdown in the June data to the start of the holy month of Ramadan, and we would expect to get a clearer picture of underlying growth momentum later in the year.”
Frost & Sullivan has predicted in a study that in the second half of 2015, the UAE economy is projected to grow by 4.5 per cent to record an annual growth of 4.4 per cent in 2015.
"Robust non-oil activities, greater public sector spending and huge foreign reserves will propel the UAE's economic growth by 4.4 per cent to US$440.18 billion in 2015 from US$416.44 billion in 2014,” it said.
"Diversification of the UAE economy has made it less vulnerable to oil price fluctuations, and heightened non-oil private sector performance will be the key factor that drives economic growth,” said Krishanu Banerjee, senior research analyst at Frost & Sullivan.
According to the key findings of the Emirates NBD-Markit survey, output rose further in June, but the rate of expansion eased sharply while new orders increased at slowest pace since April 2012. In June, cost pressures eased for a second month running.
The data indicated that the overall slowdown was mirrored by weaker expansions in output and new orders during June. Activity growth eased to a 20-month low, while new work inflows rose at the slowest pace since April 2012. However, the respective rates of increase remained marked overall.
Improved marketing strategies, new client wins and new product launches all helped to boost demand conditions, which in turn led to another expansion in output, according to panellists.
"A weaker rise in new export work contributed to slower growth of total new business in June. The latest increase was the weakest since the end of 2013, but remained broadly in line with the average recorded over nearly six years of data collection. Similarly, UAE non-oil private sector firms raised their input buying more slowly in the latest period,” it said.
"Although solid overall, the rate of expansion was the least marked in nearly two year,” it added.
While pre-production inventories rose only modestly, the rate of job creation was little-changed from the solid pace seen in the previous two months during June.
"Those companies that hired additional staff commented on the opening of new branches and efforts to expand operating capacity. Total input costs faced by UAE non-oil private sector businesses increased for the third straight month in June, albeit only fractionally. The rate of inflation was muted relative to the long-run trend, helped by slower rises in both purchase prices and staff costs in the latest period,” said the report. – Khaleej Times - http://www.khaleejtimes.com/biz/inside.asp?xfile=/data/uaebusiness/2015/July/uaebusiness_July49.xml§ion=uaebusiness

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UAE economy minister, Iranian ambassador discuss strengthening economic relations


posted on 28/06/2015

Sultan bin Saeed Al Mansouri, Minister of Economy, has received Mohammad Reza Fayyaz, Iran's Ambassador to the UAE, to discuss ways of enhancing economic relations between the two countries and engaging their private sectors in looking into investment opportunities and joint projects.
During the meeting at his office, Al Mansouri received an invitation from Iran's Economic Affairs and Finance, Ali Tayeb-Nia, to lead a UAE delegation to Iran to discuss trade and economic relations.
He noted that the efforts of the Higher UAE-Iranian Joint Commission focused on enhancing economic relations led to the signing of an agreement on setting up an Emirati-Iranian business council and a memorandum of understanding between the Federation of UAE Chambers of Commerce and Industry and Iran Chamber of Commerce, Industries and Mines.
Noting that the two countries are making efforts to expand their cooperation in various economic, investment and industrial spheres, Al Mansouri added that Iran comes fourth in terms of the relative importance for the UAE's foreign trade with non-oil trade between the two countries amounting to US$17 billion in 2014.
Underscoring the importance of promoting cooperation in civil aviation with Iran, the UAE minister noted that 200 flights a week are being operated between the two countries to boost tourism and enhance cooperation between their business communities.
Ambassador Fayyaz stressed that Al Mansouri's visit to Iran is important for looking into investment opportunities in Iranian cities as well as for promoting investments in the UAE. – Emirates News Agency, WAM – http://www.wam.ae/en/news/emirates/1395282542463.html

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UAE ranked 5th in global readiness index


posted on 26/06/2015

When it comes to dealing with change brought about by everything, from economic and political shocks, to long-term trends such as technologies and demographics, the UAE is the most prepared in the Arab world.
The country has emerged number five in the KPMG 2015 Change Readiness Index, just behind Singapore, Switzerland, Hong Kong and Norway, and ahead of developed economies like United States, United Kingdom and Japan.
It is the only Arab country that made it to the top five. Qatar, however, is trailing behind in the seventh place.
Produced in partnership with Oxford Economics, the index rated 127 countries for their capability to prepare for or respond to change caused by financial crises, political shocks and natural disasters.
It looked at the business environment, technology access, as well as fiscal, regulatory and security capabilities, among several other indicators, of 127 countries.
The UAE scored highly in terms of economic openness, which is ranked third in the world, as well as in business environment (ranked 4th), infrastructure (4th), technology infrastructure (4th), labour market (5th) and economic diversification (9th).
"[The] UAE's non-oil sector has been growing rapidly, largely due to initiatives by the government to boost the private and government sector,” noted Vikas Papriwal, head of markets, KPMG Lower Gulf.
His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, had earlier announced that 2014 was the UAE's strongest economic year.
He said the country has "anticipated many global economic scenarios, and built a range of economic policies in order to be better prepared and equipped to manage a range of variables.”
"Today we have a robust and diversified economic base, great confidence in the environment and the stability of our country, sureness and expertise to deal with a range of scenarios, and great optimism about the future and the projects we have launched,” the ruler said in a note released on June 20. – Gulf News - http://gulfnews.com/business/economy/uae-ranked-5th-in-global-readiness-index-1.1540602

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UAE tops regional countries on inclusive growth


posted on 25/06/2015

The UAE has topped countries in the Middle East and Africa (MEA) region for inclusive growth, with a score of 57.58, according to MasterCard's 2015 Middle East and Africa Inclusive Growth report.
Factors including the UAE's diversification of its economy away from oil and gas, encouragement of entrepreneurship and the development of its education, health care and tourism sectors, creating more jobs, have resulted in the county's higher ranking for inclusive growth, or sustainable output growth that is broad-based across economic sectors, creating productive employment opportunities and reducing poverty, as defined in the report.
The report, which covers 34 countries, aims to benchmark developing nations in the MEA region against the developed countries of the Organisation for Economic Cooperation and Development (OECD).
The UAE's score is 6.8 points behind the OECD average of 64.38, according to the report.
The UAE was followed by Qatar, with an index score of 55.2, Bahrain (54.56), Saudi Arabia (51.45) and Oman (50.9). Next came Tunisia, Lebanon, Botswana, Jordan, Kuwait, South Africa, Egypt, Namibia, Morocco, Cote d'Ivoire, Rwanda, Kenya, Ghana, Zambia and Senegal.
Present conditions that are driving the region's inclusive growth include economic growth, expanding economic opportunity and equality of outcomes, while the enabling conditions are employment and productivity, access to economic opportunity, governance and youth.
In the Middle East, inclusive growth is critical for social equality and well-being, as well as basic social and political stability, according to the report. "Three core and interlinked areas have to be addressed in this context: managing the ‘youth bulge', enabling the private sector, and improving governance and rule of law.”
Yasar Jarrar, co-author of the report and vice chair of the Global Agenda Council on the Future of Government, said that inclusive growth is arguably the solution for economic development concerns in the MEA region.
"When income distribution and opportunities are equalised, countries will be able to boost local consumption, power growth, and reduce poverty and unemployment, while also seeing a rise in social and economic mobility, leading to an expanding, dynamic and increasingly prosperous middle class,” he said in a statement.
While some countries in the region have taken steps to grow their economies, the current economic development models are "not fit for purpose anymore” amid challenges including political instability, growing economic divide, social unrest, and rising youth aspirations and demands, according to the report.
"These difficult conditions will continue to hamper the ambitions of regional governments and citizens until a more robust, and inclusive growth model is successfully developed and adopted. The sharp drop in oil prices recently has further highlighted these concerns and brought the region — again — into question in terms of future growth and sustainability,” MasterCard stated. – Gulf News - http://gulfnews.com/business/economy/uae-tops-regional-countries-on-inclusive-growth-1.1540388

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New orders, job creation drive UAE growth


posted on 23/06/2015

Undeterred by lower oil prices, the UAE continued to witness growth by recording a surge in new orders as job creation hit a three-month high in May, Crédit Agricole Private Banking said on Monday.
Along with the UAE, Saudi Arabia's output and new orders also expanded, but the growth rate of the Kingdom eased, said Crédit Agricole report, ‘Macro Comment — Mena Update'.
"Interestingly in the UAE, once again, new orders and new export orders reflected strong growth, while job creation hit a three-month high. This is reflected in the UAE's non-oil private sector PMI (purchasing managers index) which did not decline significantly in May (56.4) compared to 56.8 in April. On the other hand, input costs rose, contrasting with a slight decline in output prices charged by companies,” the bank said.
The bank noted that it is too early to infer from this latest change that a downward trend in the CPI (consumer price index) indices has started.
"We can see that the UAE's CPI was up 4.2 per cent year-on-year in April, which is the same as in Dubai where inflation can be an issue. Nevertheless, we can say that the UAE is yet to fully feel the pinch of the lower oil price across its relatively diversified economy in comparison to GCC peers,” said Dr Paul Wetterwald, chief economist, Crédit Agricole Private Banking.
"Similarly in Saudi Arabia, output and new orders expanded, but the rate of growth and pace of job creation eased somewhat during the month. It was interesting to note that the Kingdom's headline PMI last month (57.0) was at its lowest level since May 2014. While the most recent data in the PMI series still depicts a growing non-oil private sector economy, our estimate of growth in Saudi Arabia is more conservative,” said Wetterwald.
"For example, based inter alia on the latest Saudi Arabia Monetary Authority statistics, we get a Q1 2015 nominal GDP growth estimate.”
According to Wetterwald, the recent softening of world food prices should bring significant benefits to GCC consumers. This is indicated by the Food and Agriculture Organisation (FAO) food price index in May 2015, which was down 20.7 per cent year-over-year and 1.4 per cent month-on-month.
Crédit Agricole's observation on the UAE and Saudi Arabian growth has been complemented by data from HSBC's PMI survey. According to HSBC data, private sector business conditions and sentiment in the UAE and Saudi Arabia continue to be largely unaffected by falling oil prices.
The UAE's non-oil private sector continued to record robust growth in May even though the headline index dipped to 56.4 from 56.8 in April. Saudi Arabia's headline PMI fell to 57 in May from 58.3 in April, but it indicated another robust improvement in business conditions, said Markit Economics, which carried out the survey. – Khaleej Times - http://www.khaleejtimes.com/biz/inside.asp?xfile=/data/uaebusiness/2015/June/uaebusiness_June194.xml§ion=uaebusiness

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A note on the state of the UAE’s Economy by Mohammed bin Rashid Al Maktoum


posted on 21/06/2015

I wanted in this brief note to highlight the current status of the United Arab Emirates' economy and to outline the course we are steering in the period to come. It is my aim this note, released ahead of the annual statistical reports, will increase transparency and accessibility for those interested in our national economy and will also give guidance regarding the most important economic indicators and trends in the UAE.
Before reviewing the most important economic indicators and variables I wish to refer to several key points: Firstly, the UAE has anticipated many global economic scenarios, and built a range of economic policies in order to be better prepared and equipped to manage a range of variables; it has diversified its economy to reduce its dependence on oil, built more balanced management of global economic forces, and established a clear policy of openness and cooperation in order to align with the interests of other global players.
Secondly, 2014 was the strongest year economically for the UAE, and the country is set to continue to perform strongly in 2015. Today we have a robust and diversified economic base, great confidence in the environment and the stability of our country, sureness and expertise to deal with a range of scenarios, and great optimism about the future and the projects we have launched.
Thirdly, there is a regional need for a real economic and developmental movement, and serious steps must be taken to achieve economic integration in the Gulf to ensure the stability of the whole region. I am confident that the future of the Arab World is dependent upon realising a great developmental and economic revival, led by the Gulf States working in co-operation and achieved in cooperation with our brothers and friends.
Fourthly, the major challenges facing the region make it a necessity to implement a clear and executable Arab economic vision, launch significant economic projects, and utilise the human and natural resources of the Arab World more effectively. We must address the imbalances of the region in a comprehensive manner, covering economics, politics and security. We must understand that real and sustainable development is the only guarantee for future stability in the Arab world.
I move with you now to review the most important indicators of our state's economy, where the new numbers from the National Bureau of Statistics, which will be announced in the few days to come, indicate that 2014 was the strongest year economically for the UAE since its foundation, with a growth in Real Gross Domestic Product of 4.6%, and with Nominal Gross Domestic Product reaching Dh 1.47 trillion.
We expect to continue to achieve strong growth in 2015 as work continues on a large number of infrastructure projects, such as the expansion of national airports totalling Dh 100 billion and building the Union Rail Network, a project worth Dh 40 billion, in addition to roads and transport projects, new and improved tourist facilities, electronic infrastructure, real estate, and financial services.
The non-oil sector has experienced positive growth during the first quarter of 2015. The continuing rise in government spending and investment and the increase in government and private capital, which amounted to Dh 353 billion in 2014, also indicate continued strong growth in 2015.
The UAE will also adhere to its long-term strategy to diversify its national economy, as the non-oil sector has achieved strong growth rates in GDP (at current prices) of 8.1% in 2014. The contribution of the non-oil sector to the national economy has reached 68.6% of the constant-price GDP.
We have put in place all the necessary plans to take that contribution to as high as 80% in 2021 through intensive investment in the industrial and tourism sectors, air and maritime transport, import and re-export, as well as supporting a range of projects and initiatives based on the knowledge economy.
By developing new sectors, such as the Islamic Economy, and investing in innovation, content development and other such activities, our aim is to build towards economic diversity in 2021 in order to strengthen the economic and financial stability of the UAE and fortify ourselves against the inherent fluctuations and instabilities of world markets.
The UAE in 2014 also continued to capitalise on its strategic location and strong infrastructure in enhancing its import and export systems, as our exports – inclusive of re-exports – reached Dh 376 billion, while our imports reached some Dh 700 billion. The UAE continues to lead the Middle Eastern countries as the region's largest trading partner with the world's top 10 global economies.
The strategic plans I have launched since I assumed the role of Prime Minister in 2006 have achieved many of their goals and objectives, as national production has risen from Dh 1.3 trillion in 2006 to Dh 2.5 trillion in 2014.
The total manpower in the national labour market in 2014 reached 275,000 citizens, and we are aiming to take that number to 460,000 citizens by 2021.
Production reached some Dh 450 billion in the manufacturing industries in 2014, up from Dh 230 billion in 2006, and production in the construction sector reached Dh 295 billion in 2014, up from Dh 155 billion in 2006.
The UAE in 2014 continued to attract great talent, leading the world as a preferred destination for talent and skills according to reports, with total compensation paid to employees in 2014 reaching Dh 410 billion in all sectors, including Dh 82 billion in the government sector.
The UAE will continue implementing a long-term plan facilitating our transition to a knowledge economy – an area where the UAE is currently leading the Arab World – as we aim to triple national spending on research and development before 2021, increase the number of workers in that sector from the current 22% to 40% of the workforce over the next six years, and take the UAE from being the top of Arab countries in the Global Innovation index to be within the top ten countries in the world in 2021 in that same index.
The decrease in the oil prices has had a positive impact on the growth of many economic sectors in the UAE in 2014, as current-price growth rates for the transport and storage sector amounted to 10%, up from 7.9% in the previous year; the wholesale and retail sector was at 8%, up from 6.8% in the previous year, and the construction sector 6.1%, a substantial rise from 3.4%. This shows clearly the UAE's economy is distinguished by its resilience.
The financial sector has seen double-digit growth in 2014 of some 15%, with contributions to gross domestic product reaching Dh 122 billion. Our banking sector also continued its positive growth and expansion as the total number of banks active in the country reached 57 banks in addition to the presence of 122 representative offices of foreign banks and total assets of about Dh 2.38 trillion at the beginning of 2015.
In the tourism sector, the UAE has continued to launch a wide range of tourism projects and entertainment destinations with some 20 million tourists visiting the seven emirates according to statistics issued by the local tourist authorities. The sector continues to consolidate the country's status as one of the world's most important travel destinations with the support of the transportation, aviation, marketing and exhibitions industries and bolstered by the UAE's strong international relations and many international friendships.
I would like to end my note by emphasising that we are continuing to work to achieve better standards of living for our people, providing the best environment for our investors, and creating the best destination for our visitors. The UAE continues to approach the world with open arms, providing a safe, productive and stable environment, supportive of regional and global initiatives that aim to achieve good for the people and stability for the nations of the world.
Mohammed bin Rashid Al Maktoum Vice President, Prime Minister of the UAE, Ruler of Dubai 20th of June, 2015. – Emirates News Agency, WAM – http://www.wam.ae/en/news/emirates/1395282138504.html

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Minister of Economy: Target is to increase usage rate of smart services to 80pc by 2018


posted on 21/06/2015

Sultan Saeed Al Mansouri, Minister of Economy, Chairman of the Board of Directors of the UAE Insurance Authority (IA), Securities and Commodities Authority (SCA) and the General Civil Aviation Authority (GCAA), has announced that all four establishments have successfully achieved a 100 percent shift to electronic services and seek to increase the usage rate of smart services to 80 percent by 2018.
Al Mansouri's comments followed a review of the results of a recent report by the Telecommunications Regulatory Authority (TRA) on the smart transition of federal agencies and affiliated departments to eServices.
Al Mansouri said, "We are very pleased with the results because they validate the significant developments we are currently witnessing in the United Arab Emirates under the wise leadership of the President His Highness Sheikh Khalifa bin Zayed Al Nahyan and Vice President and Prime Minister and Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum."
Al Mansouri added, "The Ministry of Economy, Insurance Authority, Securities and Commodities Authority and the General Civil Aviation Authority have proven that they possess the capabilities and competencies required to live up to the aspirations of our leaders and elevate the level of services to contribute to the happiness of the citizens and residents of the country. Furthermore, the four authorities are seeking to increase their usage rate of smart services to 80 percent by 2018."
Al Mansouri also expressed his gratitude for all teams involved in the smooth transition to eServices. He noted that the results of the report demonstrated the high levels of responsiveness and commitment of the employees at the four establishments to adhere to the timeframe set by the UAE Prime Minister two years ago.
Applauding the milestone, the minister also stressed that achieving a 100 percent shift to eServices across 62 priority government services is a "phenomenal achievement" and endorses the UAE's leading status as a role model for development and progress on a global platform. – Emirates News Agency, WAM – http://www.wam.ae/en/news/emirates/1395282127402.html

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UAE economy set to surge 4.4% to cross $440 billion


posted on 19/06/2015

Robust non-oil activities, greater public sector spending and huge foreign reserves will propel the UAE's economic growth by 4.4 per cent to $440.18 billion in 2015 from $416.44 billion in 2014, Frost & Sullivan forecast in a study.
"Diversification of the UAE economy has made it less vulnerable to oil price fluctuations, and heightened non-oil private sector performance will be the key factor that drives economic growth,” said Krishanu Banerjee, senior research analyst at Frost & Sullivan.
In the second half of 2015, the UAE economy is projected to grow by 4.5 per cent to record an annual growth of 4.4 per cent in 2015. In 2014, the gross domestic product of the UAE surged 4.3 per cent to $416.44 billion, according to Frost & Sullivan estimates.
"Along with increased non-oil activities, greater public sector spending and a large amount of foreign reserves will contribute to the country's economic well-being,” said Banerjee.
Frost & Sullivan's forecast for the UAE is more bullish than World Bank's latest projection. In its Mena Economic Indicator report, the World Bank noted that UAE's real GDP growth would slow from 4.7 per cent in 2014 to 3.1 per cent in 2015 due to a decline in oil prices.
Recently, the International Monetary Fund (IMF) has revised the UAE's growth outlook for this year and the next to 3.2 per cent. However, the Fund forecast in its latest regional outlook report that the UAE's non-oil GDP to grow at 4.4 per cent in 2015 and 4.5 per cent in 2016.
Across the Middle East and Africa region, a robust improvement in consumption demand, generous government support, and rise in public sector infrastructure spending are expected to result in steady growth in 2015, said the study that highlights the up trends and downtrends in MEA emerging markets.
However, for Middle Eastern economies, implementing pragmatic macroeconomic policies to stabilise global oil prices at $50 to $60 per barrel is likely to remain a key challenge to revenue growth, said the study.
"Even so, the region is anticipated to witness around five per cent growth this year due to the gradual shift in investment to non-oil sectors. Steady inflation will bolster private consumption and further support the region's progress,” it said.
Frost & Sullivan study said that owing to favourable government policies and the stable improvement in private sector performance, the Saudi economy saw moderate growth in first half of 2015, despite falling oil revenue. The Purchasing Managers' Index (PMI) already went up from 58.5 in February to 60.1 in March this year, signifying an expansion in business activity in the non-oil private sector. "Thus, all signs point towards business sentiments staying bullish in the second half for Saudi Arabia.”
In 2015, Saudi GDP is expected to grow at a slower pace by 2.8 per cent to $791.4 billion from $772.07 billion in the previous year. In 2014, the kingdom's economy grew by 3.6 per cent.
In Egypt, nearly three per cent of growth is expected in second half of 2015 with the GDP reaching $320.97 billion from$ 305.87 billion in 2014.
"Nevertheless, risk factors will remain due to the impending transition in political system that has not yet occurred because the Supreme Court delayed the parliamentary elections. The political uncertainty is subduing demand, which in turn has decreased output in the country's non-oil private sector and hampered employment. Besides, a weak domestic currency is boosting input costs and a situational turnaround is unlikely in the next six months,” Frost & Sullivan said. – Khaleej Times - http://www.khaleejtimes.com/kt-article-display-1.asp?xfile=data/uaebusiness/2015/June/uaebusiness_June167.xml§ion=uaebusiness

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UAE Minister of Economy highlights Companies Law at Dubai Chamber meeting


posted on 08/06/2015

As part of its efforts to facilitate a channel of communication between the public and private sectors, Dubai Chamber of Commerce and Industry organised an event for the business community with Sultan Al Mansouri, UAE Minister of Economy, who provided an overview of the new UAE Companies Law.
The Talk Business at Breakfast meeting presided by Hamad Buamim, President and CEO of Dubai Chamber, was attended by hundreds of business people, setting an example of the cooperation Dubai Chamber facilitates between the Government and private sector at both the federal and local level.
The Minister of Economy spoke about the UAE economy and business environment and then in detail about the new UAE Companies Law.
Al Mansouri said the UAE is pursuing its vision to be among the best countries in the world by 2021. "As part of this goal and the continued growth of the economy, key drivers of entrepreneurship, small and medium size enterprises (SMEs) and innovation are a strategic priority for the Ministry moving forward, he said. Around 94% of UAE companies are SMEs and these contribute to over 60% of national GDP," he elaborated.
He said currently 96.3% of UAE Government services are smart, but that the target was to achieve 100%, and he encouraged everyone in the business community to use these smart services to help facilitate further growth.
Al Mansouri said that the UAE was a leading country in the Arab world for foreign investment. FDI inflows have risen to $11.85 billion in 2014 from $4 billion in 2009. Key sectors for investment include petrochemicals, alternative energy, transport and infrastructure, manufacturing, healthcare and education, defence and aerospace, real estate and construction, tourism and agriculture and water.
Moving to the legal framework, the Minister highlighted some important laws that are currently in process, including the Commercial Fraud, Foreign Investment, Arbitration and Anti-dumping laws. He said the Companies Law was one of the most challenging laws the UAE Government has passed, taking over 20 years of consultation and involving numerous departments and stakeholders across all seven emirates.
In total the law contains 378 articles divided into 12 chapters, regarding the general provision of companies, individual companies, Limited Liability Companies, public joint stock companies, private joint stock companies, companies and special organisations, conversion and mergers and acquisitions, expiration, foreign companies, inspection of companies, sanctions and transitional and financial provision.
The law was approved by the Federal National Council in April and contributes to the development of the business environment, increases competitiveness and enhances corporate governance.
On his part, Hamad Buamim, President and CEO, Dubai Chamber, welcomed the law saying: "The new Companies Law strengthens the protection of shareholders, increases transparency and the disclosure of financial data. Generally, it will improve the competitiveness of the economy, as well as the performance of the business environment.
"Our policy advocacy unit was part of the consultation process and it works hard to review and advise draft commercial, financial and economic legislation with regards to its impact on the business community. Last year we gave recommendations on 21 different laws at federal, ministerial and local level. This is a very important job and as the voice of the business community, we work to ensure the private sector is properly represented," Buamim said. – Emirates News Agency, WAM - http://www.wam.ae/en/news/economics/1395281582373.html

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