The United Arab Emirates (UAE)’ macroeconomic performance for 2002 was mixed. Although average crude oil prices are estimated to have risen by four percent to $24.70 per barrel, oil output is likely to have declined by about nine percent in line with OPEC-mandated cuts, stated the International Monetary Fund (IMF) in its recent country consultation.
The cuts are estimated to have contributed to a fall in real gross domestic product (GDP) growth, even though non-hydrocarbon growth remained robust on account of ongoing construction projects and rising petrochemical output. Moreover, lower crude oil receipts, together with rising imports and lower investment income, have also contributed to reducing the external current account surplus.
Amid declining revenue, government spending is expected to have remained broadly unchanged, leading to a sharp deterioration in the fiscal accounts. The estimated consolidated fiscal balance registered a deficit of about nine percent of GDP, and the non-hydrocarbon deficit widened to 26 percent of GDP.
Meanwhile, monetary developments through end-November 2002 showed a stable broad money growth, with central bank foreign assets reaching more than $15 billion. The stock markets remained bullish during much of 2002, mostly as a result of continued strong bank profits.
Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions in the UAE each year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
