ECONOMIC DEVELOPMENT - UAE Interact

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80 UNITED ARAB EMIRATES YEARBOOK 2006ECONOMIC DEVELOPMENT 81PUBLIC FINANCE 2003THE BALANCE OF PAYMENTSThe balance of payments achieved an overall surplus of Dh12.8 billion in 2004 compared to asurplus of DH4.7 billion in 2003. Both the trade balance and the current account reflected highersurpluses than in 2003, while the negative balance of the capital and financial account increased by8.3 per cent. Despite an increase by 18.3 per cent in value of total imports (FOB) compared to2003, the surplus in the trade balance rose by 34 per cent in 2004 to reach Dh104.9 billion. Thiswas mainly due to the increase in receipts from hydrocarbon sector exports, other exports and reexports,and accordingly the value of total exports and re-exports increased by 23.3 per cent toDh303.9 billion.The increase in value of hydrocarbon sector exports was attributable to increasedproduction volumes (partially related to increased refining capacity), improved gas productioncapacity and the expansion in production of condensates on the one hand, and to the increasein oil prices and hence prices of gas, condensates and petroleum products, on the other. Theweighted average price of oil rose from US$28.1 a barrel in 2003 to US$36.1 a barrel in 2004(a rise of 28.5 per cent). This, in turn, led to an increase in value of exports of oil (includingcondensates, which are not included in the country’s production quota set by OPEC) from Dh81.2billion in 2003 to Dh108.8 billion in 2004 (34 per cent) and in value of exports of gas by 19.9per cent, compared to 2003, to reach Dh17.2 billion. The value of petroleum products’ exports alsoincreased to Dh15.2 billion in 2004 against Dh13 billion in 2003 (16.7 per cent). The value ofcommodity exports, including the free zones, has continued to rise over the past few years, toreach Dh60.9 billion compared to Dh51.2 billion in 2003 (19.1 per cent). Free-zones’ exportsconstitute 80 per cent of the country’s commodity exports, valued at Dh48 billion in 2004.Moreover, the value of re-exports (including non-monetary gold) also rose from Dh86.1 billion in2003 to Dh101.8 billion in 2004 (18.3 per cent). A substantial portion of this increase reflectsgreater reliance by some GCC countries on the UAE’s seaports for imports, a phenomena that hasreceived a boost from establishment of the GCC Customs Union.On the other hand, the value of total imports FOB (including free-zone imports) increased fromDh168.3 billion to Dh199 billion. This may be attributed to rapid construction and buildingactivity, as well as rising domestic and external demand resulting from population increase andthe need to meet the requirements of re-exports. Imports per capita rose from Dh15,300 in 2003to Dh17,100 in 2004. Data on the structure of imports during 2004 show that consumer, capitaland intermediate goods maintained almost the same shares recorded in 2003, at 60 per cent, 30per cent and 10 per cent of total imports respectively. The geographical distribution of the totalvalue of imports shows that the European countries’ share dropped from 30.1 per cent in 2003to 29.8 per cent in 2004. Asian countries rose slightly to 45 per cent against 44.7 per cent in2003. It is noteworthy that countries in this group maintained the same respective shares as in2003. Meanwhile, the North American share declined from 9.9 per cent in 2003 to 9.6 per centin 2004.The balance of the current account rose by 71.3 per cent in 2004 compared to 2003, to reachDh47.5 billion.Estimates of UAE Balance of Payments (Dh bn)2003 2004*Current Account Balance ........................................................ 27.73 47.51Trade Balance (FOB) ............................................................... 78.26 104.86Total Exports of Hydrocarbon........................................ 108.57 141.18Crude Oil Exports .................................................. 81.22 108.79Petroleum Products Exports .................................... 12.99 15.16Gas Exports ........................................................... 14.36 17.23Total of Non Hydrocarbon Exports ............................... 51.93 60.94Free Zone Exports .................................................. 41.34 47.97Other Exports 1 ..................................................... 10.59 12.97Re-Exports 2 ................................................................ 86.06 101.78Total Exports and Re-Exports (FOB) ........................... 246.56 303.90Total Imports (FOB)..................................................... –168.29 –199.04Total Imports (CIF) ..................................................... –191.24 –226.18Other Imports 3 ..................................................... –147.93 –175.68Free Zone Imports ................................................. –43.31 –50.50Services (NET) ......................................................................... –33.27 –39.72Travel ........................................................................... –9.25 –10.58Transport...................................................................... –1.19 –2.12Government Services.................................................... 0.11 0.12Freight and Insurance................................................... –22.95 –27.14Investment Income (NET) ......................................................... –0.14 0.93Banking System 4 ......................................................... 1.66 2.72Private Non-Banks........................................................ 0.28 0.30Enterprises of Public Sector .......................................... 7.16 13.91Foreign Hydrocarbon Companies in UAE....................... –9.24 –16.00Transfers (NET) ........................................................................ –17.12 –18.57Public Transfers....................................................... –1.00 –1.50Workers Transfers ................................................... –16.12 –17.07Capital and Financial Account ............................................... –19.58 –21.21Capital Account 5 ......................................................... — —Financial Account ......................................................... –19.58 –21.21Enterprise of Private Sector..................................... 19.44 39.80Direct Investment............................................... 11.99 27.00Outward........................................................ –3.64 –3.70Inward .......................................................... 15.63 30.70Portfolio Investment........................................... — 7.35Banks................................................................ 1.05 –2.56Securities ...................................................... –6.55 0.40Other Investment .......................................... 7.60 –2.96Private Non-Banks ............................................. 6.40 8.01Enterprises of Public Sector..................................... –39.02 –61.01Net Errors and Omissions ......................................................... –3.42 –13.47Overall Balance: Surplus (+) or Deficit (-) .............................. +4.73 +12.83Change in Reserves (- indicates an increase).......................... –4.73 –12.83Net Foreign Assets with Central Bank ........................... –4.59 –12.97Reserve Position with I.M.F. .......................................... –0.14 0.141 Including estimates of exports from all emirates.2 Including re-exports of non-monetary gold.3 Including imports of non-monetary gold.4 Central Bank and all banks.5 Data not available at time of compilation.* Preliminary Estimates Source: Central Bank Statistical Bulletin Vol. 25 No. 1.
82 UNITED ARAB EMIRATES YEARBOOK 2006ECONOMIC DEVELOPMENT 83Selected Monetary and Banking Indicators* (Dh mn)INDICATOR 2003 2004 2005...................................................... (March)Central Bank of UAE......................Total Assets/Liabilities................. 54,502 67,639 70,656Foreign Assets and Gold Holdings 54,221 67,389 70,395Currency issued .............................. 15,969 18,492 19,045Liquidity Indicators*Money Supply (M1) .................... 58,262 80,818 94,236Private Domestic Liquidity (M2) .. 200,600 248,406 264,944Overall Domestic Liquidity (M3) .. 250,942 310,830 322,455Banks 1*Total Assets/Liabilities................. 366,908 450,020 497,472Foreign Assets ............................ 111,727 126,381 133,539Foreign/Total Assets (%)............. 30.5 28.1 26.8Foreign Liabilities ....................... 30,294 42,391 52,342Foreign/Total Liabilities (%) ........ 8.3 9.4 10.5Deposits 2* ..................................... 237,557 297,180 309,448Residents 2 .................................. 226,338 283,627 293,730Non-residents............................. 11,219 13,553 15,718Bank Credit (Net) 3 ......................... 192,675 255,599 288,043Residents ................................... 164,922 217,185 249,700Non-Residents............................ 27,753 38,414 38,343National Banks and Branches 4 .... 367 383 396Head Offices................................... 21 21 21Branches ........................................ 346 362 375Foreign Banks and Branches 5 ...... 112 112 112Head Offices................................... 25 25 25Branches ........................................ 87 87 87Number of Workers in UAE Banks 6 17,229 19,288 20,092Dh Millions1. Including the Restricted Licence Bank until 31/5/2003 4. Including Pay Offices2. Excluding Inter-Bank Deposits 5. Including a Pay Office3. Excluding Loans to Banks and Provisions 6. Excluding Auxiliary Staff* Including Deposits of UAE Residents Booked in Overseas Branches (Including Offshore Units) and Subsidiaries of National Banks Abroad.Source: Central Bank Statistical Bulletin Vol 25, No. 1360,000320,000280,000240,000200,000160,000120,00080,00040,0000Money Supply & Domestic Liquidity2003 2004 2005 (March)Currency with the PublicM1M2M3Millions of Dhs200,000150,000100,00050,0000Foreign Assets2004 2005 (March)Total Foreign AssetsNet Foreign AssetsEconomic Summary2003 2004*Population (000) .............................................................................. 4,041 4,320Workers (000) ................................................................................ 2,334 2,459GDP in current prices (billion Dh) .................................................... 321.7 378.8GDP Non Oil Sectors (billion Dh) .................................................... 229.6 255.5GDP At Constant 2000 Prices (billion Dh) ....................................... 301.3 323.6Per Capita GDP................................................................................ 74.6 74.9Gross Fixed Capital Formation (billion Dh) ...................................... 63.1 65.2Final Consumption Expenditure (billion Dh) .................................... 188.7 201.2Commodity Exports (billion Dh) ...................................................... 241.8 269.0Commodity Imports (billion Dh) ...................................................... 190.9 213.0Current Surplus Merchandise (billion Dh) ........................................ 51.0 56.0Inflation Rate (%) .......................................................................... 3.1 3.0*Preliminary Data Source: Ministry of Planning Report 2004.Economic Projections*(per cent unless otherwise indicated) 2005* 2006*Real GDP growth............................................................................. 6.8 6.4Oil production (‘000 b/d).................................................................. 2,462 2,525Crude oil exports (US$ m)................................................................ 34,923 31,678Consumer price inflation (av)............................................................ 3.3 3.0Deposit rate..................................................................................... 3.4 4.7Government balance (per cent of GDP)............................................. -0.5 -4.5Exports of goods fob (US$ bn).......................................................... 83.4 81.7Imports of goods fob (US$ bn).......................................................... 54.2 59.0Current-account balance (US$ bn).................................................... 14.8 8.3Current-account balance (per cent of GDP)....................................... 15.4 9.1External debt (year-end; US$ bn)...................................................... 28.4 30.5Exchange rate Dh:US$ (av)............................................................... 3.67 3.67*Source: Economist Intelligence Unit and Abu Dhabi Chamber Of Commerce & Industry - Information Centre.*predicted
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