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153267
Mon, 12/13/2010 - 16:27
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https://oananews.org//node/153267
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Standard Chartered Bank expects UAE growth at 4.0 per cent in 2011
Dubai, Dec 13, 2010 (WAM)- 2010 was challenging, but it was nevertheless a year of economic recovery for the UAE, according to Standard Chartered Bank ''Economic Outlook 2011''.
''We estimate 2010 growth at 3.0%. The economy should gain momentum in 2011, but it is unlikely to boom - we expect a growth rate of 4.0%, the report expected.
''The main contributors to GDP are hydrocarbons (29.2%), ‘other services' (13%), manufacturing (16%), construction (11%), trade (9%) and financial services (6%). We expect Dubai's services and trade sectors to drive growth in 2011, while infrastructure plans in Abu Dhabi will boost the construction and services sector,'' the report said.
Given Dubai's role as the world's third-largest re-export centre (trade activity makes up 40% of the emirate's GDP), global trade trends will be important. 2010 saw a significant rebound in global trade; this, along with rapid growth in the retail and hospitality sectors, drove Dubai's recovery, despite the challenges of a suppressed housing market and debt overhang. We expect Dubai's economy to grow 4.0% in 2011.
''According to the government's Plan Abu Dhabi 2030, Abu Dhabi aims to increase the GDP contribution of its non-oil sector to 64% by 2030. Investment in non-oil projects will be paramount to achieving this goal. We expect growth in Abu Dhabi to reach 5.0% in 2011.
Financial issues UAE credit growth was weak throughout 2010. A key reason for this is that bank loans still exceed deposits.
The gap narrowed from Dh47.1bn in January 2010 to Dh25.5bn in September, but this was the result of increased deposits and flat credit growth on a m/m basis.
The lack of credit growth is taking away from growth dynamics, and is particularly problematic for SMEs.
Credit conditions should begin to improve moderately in 2011 on the back of the economic recovery and improving market sentiment following Dubai's planned debt restructuring.
Following the debt restructuring agreements, Dubai's government and quasi-sovereign entities have regained access to international markets. The subsequent pick-up in debt issuance, while it reflects improving investor sentiment, should also be viewed in light of strong investor appetite for emerging-market debt in general.
Low interest rates in the rest of the world should give UAE entities increased access to global markets, which will help to meet Dubai's refinancing needs. The good news is that Dubai has already successfully tapped the credit markets in 2010 and is likely to be able to continue to do so in 2011 should extra funding be needed.
''We estimate that the value of all projects executed in the UAE increased to USD 61bn in 2010 from US$47.1bn in 2009. Much of the spending increase was driven by Abu Dhabi quasi-sovereign entities. We believe 2011 will see renewed investment in project development by quasi-sovereign entities, but we also expect a sharp rebound in sovereign spending on infrastructure. Project spending in the UAE is likely to rise to US$85billion as projects delayed in 2011 break ground. – Emirates News Agency, WAM
''We estimate 2010 growth at 3.0%. The economy should gain momentum in 2011, but it is unlikely to boom - we expect a growth rate of 4.0%, the report expected.
''The main contributors to GDP are hydrocarbons (29.2%), ‘other services' (13%), manufacturing (16%), construction (11%), trade (9%) and financial services (6%). We expect Dubai's services and trade sectors to drive growth in 2011, while infrastructure plans in Abu Dhabi will boost the construction and services sector,'' the report said.
Given Dubai's role as the world's third-largest re-export centre (trade activity makes up 40% of the emirate's GDP), global trade trends will be important. 2010 saw a significant rebound in global trade; this, along with rapid growth in the retail and hospitality sectors, drove Dubai's recovery, despite the challenges of a suppressed housing market and debt overhang. We expect Dubai's economy to grow 4.0% in 2011.
''According to the government's Plan Abu Dhabi 2030, Abu Dhabi aims to increase the GDP contribution of its non-oil sector to 64% by 2030. Investment in non-oil projects will be paramount to achieving this goal. We expect growth in Abu Dhabi to reach 5.0% in 2011.
Financial issues UAE credit growth was weak throughout 2010. A key reason for this is that bank loans still exceed deposits.
The gap narrowed from Dh47.1bn in January 2010 to Dh25.5bn in September, but this was the result of increased deposits and flat credit growth on a m/m basis.
The lack of credit growth is taking away from growth dynamics, and is particularly problematic for SMEs.
Credit conditions should begin to improve moderately in 2011 on the back of the economic recovery and improving market sentiment following Dubai's planned debt restructuring.
Following the debt restructuring agreements, Dubai's government and quasi-sovereign entities have regained access to international markets. The subsequent pick-up in debt issuance, while it reflects improving investor sentiment, should also be viewed in light of strong investor appetite for emerging-market debt in general.
Low interest rates in the rest of the world should give UAE entities increased access to global markets, which will help to meet Dubai's refinancing needs. The good news is that Dubai has already successfully tapped the credit markets in 2010 and is likely to be able to continue to do so in 2011 should extra funding be needed.
''We estimate that the value of all projects executed in the UAE increased to USD 61bn in 2010 from US$47.1bn in 2009. Much of the spending increase was driven by Abu Dhabi quasi-sovereign entities. We believe 2011 will see renewed investment in project development by quasi-sovereign entities, but we also expect a sharp rebound in sovereign spending on infrastructure. Project spending in the UAE is likely to rise to US$85billion as projects delayed in 2011 break ground. – Emirates News Agency, WAM
