By Staff writer
Emirates NBD revises down 2017 UAE real GDP growth forecast on back of OPEC’s decision to extend production curbs
The UAE economy grew by 3 percent in real terms last year, according to provisional data released by the country's Federal Competitiveness and Statistics Authority.
The growth rate was exactly in line with a forecast by Emirates NBD and slower than the 3.8 percent growth recorded in 2015.
Emirates NDB also said it has revised down its 2017 UAE real GDP growth forecast to 2 percent from 3.4 percent previously on the back of OPEC’s decision in May to extend production curbs through March 2018 which means that the UAE’s crude output will decline.
It added that its expectation for a rebound in the UAE's non-oil sectors this year remains unchanged.
The 2016 figures, cited by Dubai's biggest bank in a new report, said mining and quarrying, which includes crude oil and gas extraction, expanded 3.8 percent in 2016, while the non-oil sectors grew 2.7 percent.
The non-oil growth represented a slowdown on 2015 when it grew by 3.2 percent, Emirates NBD noted.
It added that the fastest growing non-oil sector - and the biggest contributor to overall growth last year - was transport and storage which expanded 7.4 percent on an annual basis.
Manufacturing and construction were the other key drivers of the UAE’s growth last year, up 6 percent and 3 percent respectively.
The wholesale and retail trade sector, which alone accounts for more than 10 percent of GDP, expanded just 0.5 percent in real terms in 2016, although this was an improvement from 2015.
Accommodation and food services grew 5.7 percent in 2016, after remaining flat in 2015, confirming a recovery in the travel, tourism and hospitality sectors last year, the report added.
According to the report, only two sectors contracted in 2016 - financial & insurance activities (down 2.7 percent) and public administration, defence and social security (down 0.3 percent), as private sector credit growth slowed and the government curbed spending on the back of lower oil revenues.