Strong non-oil growth to propel capital's GDP
The gross domestic product (GDP) of Abu Dhabi is expected to hit $300 billion (Dh1.1 trillion) by 2025 on the back of steady growth in the non-oil sector, which will contribute 60 per cent of the GDP by then, according to the emirate's Department of Planning and Economy's (DPE) weekly report.
The report observed that during the past five years Abu Dhabi's economy has witnessed the strongest ever diversified development through proper investment of the income generated from high oil prices in international markets. It added that the expectations are based on the huge projects currently under way in several sectors in the emirate's economy.
"Abu Dhabi is moving steadily into the future under a strategic plan and guidelines aiming at a radical transformation in the emirate's economic structure," the report said.
"In 2015, Abu Dhabi's GDP will rise to $170bn, of which the oil sector will constitute 50 per cent. But the non-oil sector will overtake the oil sector by 2020, contributing 55 per cent of the projected $230bn GDP. By 2025, Abu Dhabi's GDP will jump to $300bn, of which the non-oil sector's share will be 60 per cent," the report added.
Abu Dhabi's economy enjoys multiple strengths and opportunities as all basic elements of growth are available, such as abundant cash surplus and a stable political leadership committed to reforms, the report went on to say. It based its forecast of the continuous growth in the emirate's economy on factors such as soaring oil prices, the projects under way in the emirate with a combined value of more than half a trillion dirhams, an open-door policy for investors, a liberal economy and reform programmes, privatisation and partnerships with foreign countries.
However, on a cautionary note, the report said challenges remain on how to sustain the projects and further diversify the economic base. The private sector needs further invigoration, it said and a world-class business environment needs to be provided. Most importantly, counter-inflationary plans needed to be put in place.
Abu Dhabi is currently taking steps towards a balanced diversification of the local production base and sources of income. Structural reforms – a process initiated three years ago – boosted the expansion of non-oil sectors.
Analysts unanimously expect Abu Dhabi to score a steady increase in its growth rate over the next few years.
The catalysts for this include a comfortable financial position supported by steadily increasing oil prices, a highly-developed business environment, and good results of macroeconomic management, which paved the way for solid socio-economic development during the past years.
Currently, Abu Dhabi's GDP is in the range of $100bn, of which the oil sector represents about 58 per cent and the non-oil sector 42 per cent.
The average per capita GDP – already the second highest in the world at $74,000 in 2006 – is also expected to grow. (Wam)
Production-based economy
According to the Department of Planning and Economy's (DPE) study, the ongoing multi-faceted development in Abu Dhabi is only the beginning of a bigger leap. The DPE's Public Policy Agenda of 2007-2008 aims to build a production-oriented economy with the following basic fundamentals:
- Quality educational and health services.
- Highly developed infrastructure sector.
- Sustainable knowledge-based economy.
- Transparent legislative environment.
- Security and stability and maintaining good relations with all countries.
- Developing local resources.
- Observing the emirate's values, culture and heritage.
- Cementing bonds with other emirates.
- Industrial expansion to be based on industries with relative advantages in raw material and energy.
- Training UAE nationals for gradual contribution to industrial growth.