UAE current account surplus quadruples in 2011

The 2011 calculation is based on a GDP estimate by the International Monetary Fund
UAE current account surplus quadruples in 2011
UAE dirhams
By Reuters
Thu 17 May 2012 05:06 PM

The UAE's current account surplus quadrupled to AED112.7bn (US$30.7bn) in 2011 as both crude and non-oil exports soared, the central bank's annual report showed on Thursday.

The surplus surged to 8.5 percent of gross domestic product last year from 2.4 percent, or AED26.6bn, in 2010, according to a Reuters calculation.

The 2011 calculation is based on a GDP estimate by the International Monetary Fund since the UAE's statistics office has yet to release GDP data for last year. The OPEC member's 2010 balance of payments data has been revised.

Last year's outcome is smaller than the IMF estimate for a surplus of 9.2 percent of GDP, released following regular consultations with the country in February and March.

The value of UAE hydrocarbon exports surged nearly 50 percent to AED409.9bn last year (US$111bn), helped by robust oil prices and higher output as a part of the OPEC drive to help cover shortfalls due to a civil war in Libya.

Crude accounted for 81 percent of hydrocarbon exports of the UAE, one of the world's top five oil exporters, with the rest almost evenly divided between gas and petroleum products.

A Reuters poll in March showed analysts expecting the UAE's hydrocarbon export revenue of US$110bn in 2012.

Non-oil exports jumped 22 percent to AED228.0bn, while re-exports rose 23 percent to AED396.5bn, the data showed. Imports to the US$360bn economy, the second largest in the Arab world, were also up 23 percent last year, at AED742.4bn.

The net balance on the UAE capital and financial account turned negative in 2011, reaching AED60.4bn, which indicates a net outflow of capital from the Gulf country, the central bank said.

"This was due mainly to a net outflow of capital by the public sector, in the amount of AED95.0bn, while the net inflow of private capital was in the amount of AED34.6bn in 2011," it said.

Direct investment soared 40 percent to AED28.2bn in 2011, the highest level since AED50.4bn in 2008, when the global crisis pierced Dubai's property bubble.

Remittances sent home by UAE nationals working abroad rose to AED41.2bn last year from AED38.8bn in 2010, the report showed.

The UAE, which has one of the highest incomes per capita globally, served as a safe haven for last year for foreign capital seeking a refuge from the wave of social unrest in the Middle East and North Africa.

The central bank's foreign currency assets increased to AED169.4bn in 2011 from AED153.4bn in the previous year. Its investments abroad into highly rated securities, government bonds and treasury bills rose to AED72.3bn from AED68.4bn in 2010, the report said.

The central bank did not give further details on the nature of its investments. It has traditionally kept the majority of its reserves in dollar-denominated assets due to its currency peg to the U.S. dollar.

The UAE's economic growth is forecast to ease to 3.1 percent this year, a Reuters poll showed in March, from the IMF estimated 4.9 percent in 2011, partly due to a global slowdown.

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