By Stanley Carvalho
UPDATE 1: Economy chief upbeat on recovery, lowers inflation forecast for 2010 to 2.5-3%.
Investments in Abu Dhabi infrastructure, property and manufacturing are expected to reach about $1 trillion in the medium term, the UAE economy minister said on Monday.
"The planned investments to be implemented in Abu Dhabi through public and private partnerships in infrastructure, real estate and manufacturing sectors over the medium term are expected to reach $1 trillion," Sultan bin Saeed al-Mansouri said.
The emirate, one of seven comprising the UAE, has projects currently underway worth around $100 billion, the minister said.
He added that he believed the UAE was firmly on the path to recovery and inflation was expected to be 2.5-3 percent this year, lower than his previous forecast.
"My expectation is we will manage (inflation) between 2.5 to 3 percent this year," Mansouri said on the sidelines of a conference.
When asked whether the UAE is firmly on the path to recovery he said: "Yes, definitely at 100 percent."
He did not want to predict the rate of economic expansion in the world's second-largest Arab economy next year, reiterating his forecast last month for 1.3 percent growth this year.
The UAE central bank deputy chairman Omar bin Sulaiman said last week growth could exceed 4.5 percent in 2010, adding he was not particularly worried about inflation following a shake-out in the property sector.
In September, the central bank governor said the economy could shrink or register a low growth rate in 2009. The International Monetary Fund expects contraction of 0.2 percent this year and growth of 2.4 percent in 2010.
Inflation, a big headache in the region in the previous years of oil and property-fuelled boom, so far seems to be subdued in the world's third largest oil exporter.
Asked about the next year Mansouri said: "We hope to control it unlike in the last few years."
In September, Mansouri expected the annual inflation rate in the UAE to be around 3.5 percent to 4 percent in 2009, down from 12.3 percent last year.
He said on Monday consumer price growth was at around 2.6-2.9 percent on average so far this year.
UAE consumer prices fell 0.15 percent on an annual basis in August, in a first decline since the ministry started providing monthly figures in June, mainly due to fall in food, clothing and rental costs. (Reuters)
If the emirate of Abu Dhabi has approx 1.5m inhabitants, $1tn of investment equates to around $665,000 per person. Even over 20 years, thats still over $30,000 per year per person. Can this be right/feasible, or are they banking on a huge population explosion?