Oil can't push UAE's GDP further: Expert

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IANS | 07 Jun, 2012
As Abu Dhabi's oil production is near its maximum capacity, the oil and gas sector is not expected to drive the United Arab Emirates (UAE) output growth in 2012 as it did in 2011, according to chief economist of Abu Dhabi's largest bank.

Giyas Gokkent, chief economist and head of research of National Bank of Abu Dhabi, said in a study on the UAE National Income that "in 2011, the rise in oil and gas sector output accounted for 49 percent of overall real GDP growth in the UAE", Xinhua reported.

On Monday, UAE Minister for Economy Sultan Al Mansoori said that he expected the real GDP growth in 2012 to fall to 3 percent, down from 4.2 percent last year.

But due to fickle performance in oil prices, which lost 18 percent in the last four weeks (US crude) and because Abu Dhabi, where 90 percent of the UAE's oil is located, is producing at its maximum capacity, the carbon industry will not be able to push the Gulf state's economic performance further.

Because of this, Gokkent even expects that the UAE real GDP to increase only by 2.6 percent in 2012.