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UAE economy surges on oil, trade

The United Arab Emirates economy grew at the third-fastest pace in at least five years in 2006, spurred by growth in petroleum, manufacturing, and wholesale and retail trade, the country's economy ministry said on Sunday.

The economy, the second-largest among Arab nations, expanded 8.9% to 389.5 billion dirhams ($106.1 billion), statistics received by Reuters showed. That compares with 11.9% in 2003 and 9.7% in 2004.
Petroleum rose 5% to 99.9 billion dirhams, manufacturing 13% and the wholesale and retail trade 10.5%, the data showed. Construction surged 16%.

"The non-oil sector is the engine of real growth. It's what is driving the UAE economy forward," said Simon Williams, regional economist at HSBC, who had estimated growth of 9.3% for the year.

A Reuters survey of seven analysts in December put the average for 2006 at 8.9%.

UAE gross domestic product has grown 44.6% since 2002, fuelled partly by a tripling of oil prices in the five years to July.

Governments of the world's biggest energy-exporting region, including Saudi Arabia, Kuwait and Qatar, have invested record oil revenue in infrastructure, industrial and real estate projects, spurring economic growth.

Public and private investment in the United Arab Emirates grew 29% to 121 billion dirhams compared with 2005 and consumption expanded 25% to 365 billion dirhams, the ministry said, without making clear whether the data were real or nominal.

The economy should grow by 6.2% this year, its slowest rate in five years, Minister of Economy Sheikha Lubna al-Qassimi said earlier this month.

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