Abu Dhabi posts fastest economic growth in 2011

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An aerial view of the Al Kakara oil field in the UAE. Photo – ArabianOilandGas.com

Data released by the Abu Dhabi government showed on Sunday the capital city’s economy grew 6.8% in inflation-adjusted terms last year, the fastest rate since 2004 and more than double the pace of the previous year.

“Growth in GDP at constant prices during 2011 surpassed all the forecasts and estimates made by local and international parties,” the Statistics Centre Abu Dhabi said.

The real gross domestic product of Abu Dhabi, one of seven United Arab Emirates, rose 3.0% two years ago. Abu Dhabi, which accounts for most of the UAE’s crude oil output and about 65% of the GDP of the second largest Arab economy, released detailed inflation-adjusted GDP data for the first time on Sunday.

In the past, the statistics centre only published nominal GDP data.

Proceeds from the hydrocarbon sector, which account for over half of Abu Dhabi’s real GDP, hit 9.4% in 2011, the strongest growth rate since 2004 and well up from 2.0% in 2010.

Growth in non-oil activities was much more moderate at 4.1% last year, only slightly above the 3.9% clip in 2010 and roughly half of the average rate over the past decade, the data also showed.

Analysts believe the UAE, the world’s No. 3 oil exporter, benefited last year when it boosted oil output to help cover a production shortfall in civil war-torn Libya, a factor which will not be repeated in 2012. Global economic weakness is also expected to take its toll this year.

As a result, Abu Dhabi’s economic growth is likely to slow to 3.9% this year, but should pick up in the next few years, helped by diversification away from oil, its Department of Economic Development said in September.

Analysts polled by Reuters in September forecast economic growth in the whole UAE would slow to 3.2% in 2012 from 4.2% last year.

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