A steep rise in its economy because of surging crude prices and rapid growth in non-oil sectors turned Abu Dhabi into the second richest destination in the world last year, an economic official in the emirate said yesterday.
The Emirate's GDP per capita income swelled to a record $71,200 (Dh261,304) in 2007, the world's second highest per capita income, said Ahmed Al Minawi, an economic expert at the Abu Dhabi Department of Planning and Economy.
Minawi also forecast Abu Dhabi GDP to nearly quadruple to $315 billion (Dh1.15 trillion) in 2025 as a result of high oil prices, a massive investment programme and a rapid growth in non-oil sectors.
In a lecture at the Department, Minawi did not name the wealthiest nation but Qatar said early last year it was heading for the top rank in the wealthy club.
His figures showed Abu Dhabi was far ahead of Western and other industrial countries in terms of GDP per capita income, which averaged around $32,200 (Dh118,174) in 2007. It stood at $45,800 (Dh168,086) in the United States and nearly $33,600 (Dh123,312) in Japan.
"The emirate's economy has recorded strong growth over the past five years and the trend is expected to be maintained and even to strengthen in the coming years because of high oil prices, the advanced infrastructure in the emirate and the sound management of the economy," he said.
His estimates showed the GDP would surge from $79bn in 2005 to $122bn in 2010, to $173bn in 2015, round $234bn in 2020 and $315bn in 2025.
The non-oil sector will leap from $47bn, or around 59 per cent of the GDP in 2005, to $189bn, or 60 per cent of the GDP in 2025.
"In 2050, it is projected that the oil sector will account for less than 20 per cent of the GDP," he said.
INFLATION POSES RISKSAbu Dhabi's economy could grow to $179.1bn (Dh657bn) by 2010, more than double its level in 2005 as the non-oil sector expands, although inflation poses a risk to growth, the emirate's planning council said yesterday.
"The growth is enormous but we have a slight fear about inflation; it is diminishing growth," said Ahmed Al Minnawi, an economist at the department and report's author.
"Up to five per cent inflation is reasonable for any economy but more than that causes problems," he said.
Inflation in Abu Dhabi hit 11.9 per cent in the first quarter – almost on par with its level in 2007. UAE inflation of 11.1 per cent in 2007 was the highest in at least 20 years.
Rises in consumer prices – including rents and food items – were the source of about 60 per cent of inflation, while the rest has resulted from the UAE's currency peg to the weak US dollar and global commodity prices, Minnawi said.
Different government departments, the central bank and each emirate should work together to battle inflation, he said. "In 2010 or 2011, we expect the real estate market will come to equilibrium and rents should stabilise."
Meanwhile, the economy is set to surge.
The state and private investors are set to invest about $163bn in real estate developments in the emirate by 2030, according to a government projection last year.
Follow Emirates 24|7 on Google News.
