Abu Dhabi Real Growth in 2012: 5%
Also, S&P estimates Abu Dhabi’s GDP per capita at US$ 110,000 in 2012.
The MENA Weekly Monitor, Week 49
Standard and Poor’s (S&P) announced that it expects the Emirate of Abu Dhabi to record a real growth of 5% in 2012, slightly down from the 6.8% it had posted in 2011. The rating agency also estimated that GDP per capita for 2012 would be at US$ 110,000, making Abu Dhabi one of the wealthiest economies in the world.
The agency said economic diversification efforts and government public spending have helped sustain non-oil economic growth at 4% in 2011. It was boosted by activity in the financial sector as well as manufacturing and transport. Real GDP would rise by circa 5% in 2012, boosted by a 6.4% growth in oil output coupled with a 4% growth in non-oil activity.
Assuming an oil export price of US$ 112 per barrel this year, S&P said it estimates Abu Dhabi’s fiscal surplus at 15.4% of GDP, up from 13.4% of GDP in 2011. The agency added that the Emirate would witness a revenue growth of 57% which would accommodate a 25% increase in expenditures, including hikes in development spending, ongoing financial support to government-related entities (GREs), and assistance grants.
Government spending in Abu Dhabi rose by an annualized 19% in 2008-2011 in response to the global credit crisis, and to meet higher social and public infrastructure needs in Abu Dhabi and the Northern Emirates.
In 2013-2015 and assuming that oil prices remain around US$ 100 per barrel, S&P expects the fiscal surplus to average 10% of GDP, further enhancing the Emirate’s net external asset position. S&P also said the government’s substantial net asset position, which it estimates at 191% of GDP in 2012, would provide it with a comfortable buffer to meet contingent liabilities that may arise, particularly from GREs.
The agency said that the ratings were constrained by its view that the Emirate has weak political institutions, a lack of transparency and public accountability, and limited availability of timely financial and economic data, particularly regarding government assets. It added that the ratings could come under pressure if there was a sharp and sustained decline in oil prices or if there were a prolonged depletion in the government’s asset position.
Published in The MENA Weekly Monitor Week 49 released by Bank Audi.