w w w.abudhabichamber.

ae

Bader
Biannual Abu Dhabi
Economic Report
January 2016
Issue 01-08122015

In association with

www.ihs.com

BADER REPORT|January 2016

Dear reader
Abu Dhabi Chamber of Commerce & Industry and IHS are delighted to present the
new Biannual Abu Dhabi Economic Report. This joint publication aims to provide a
comprehensive yet succinct economic overview for the Emirate of Abu Dhabi.
While the focus of this publication is on the private sector in particular, the Biannual Abu
Dhabi Economic Report will inform about key economic trends in Abu Dhabi, update on the
business cycle, and provide assessment on linkages between Abu Dhabis economy, the
Middle East region, and global growth patterns. Also provided is a tool to benchmark Abu
Dhabis economy against major global economies.
Abu Dhabi has set out a strategy to wean the Emirate off its dependence on the
hydrocarbon sector in the long term, while nurturing private sector business activity and
entrepreneurship. This is both obvious and important for the sustainability of Abu Dhabis
successful economic path and long-term prosperity. Nothing illustrates this better than the
repercussions from the recent fall in global oil prices on oil-producing countries.
Progress has been made in recent years toward a more balanced economy. In fact, Abu
Dhabis recent economic performance signals that this progress has already brought real
returns as the economy has improved its capacity to absorb shocks like the steep oil price
decline since the global recession.
Yet, despite recent progress, there is still some way to go. Indeed, further development of
the private sector will play a critical role in accomplishing the long-term goal of a balanced,
diversified economy.
The mission of the Abu Dhabi Chamber of Commerce & Industry is to support the
private sector through providing world-class services, studies, and reports, with the aim
of increasing the international competitiveness of the Emirates private sector companies
and expanding their opportunities. IHS is pleased to support this important mission by
contributing its economic and industry analysis and insight.
We sincerely hope that this publication will help to inform about key private sector trends,
progress to date, and support related strategies to a successful end.

COPYRIGHT NOTICE AND DISCLAIMER

Copyright 2016 by Abu Dhabi Chamber of Commerce and Industry
All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, scanning, recording, or other electronic
or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in non-commercial uses permitted by copyright law.
For permission requests, write to the publisher, addressed to:
BADER Permissions Coordinator
Main Building of Abu Dhabi Chamber of Commerce and Industry,
Corniche Rd., P.O.Box 662
Tel + 971 2 6214000
Fax + 971 2 6215867
E-mail: contact.us@adcci.gov.ae
8:00 AM - 3:00 PM (Sun - Thu)
Printed in the United Arab Emirates

www.abudhabichamber.ae

2016 Abu Dhabi Chamber of Commerce & Industry

www.linkedin.com/company/abu-dhabi-chamber

Cover image: Shutterstock

Biannual Abu Dhabi

Economic Report
Half-decade of high growth

Headline growth in
Abu Dhabi has
been robust, but
private sector
development has
been uneven

The Emirate of Abu Dhabi has seen a

robust economic performance during
the last several years. The economy
rebounded quickly from the brief downturn
during the global recession, charging
forward at an average speed of 6% in
the five years between 2010 and 2014.
High oil prices, moderate price inflation,
macroeconomic stability, and the global
recovery provided a fertile ground for
Abu Dhabis economy to flourish and
the construction and real estate boom to
resume. (see chart at bottom of page)
The non-oil economy has outpaced the
oil sector with an average half-decade
growth rate of 6.4%. Indeed, non-oil growth
surpassed oil growth by more than two
percentage points in the last two years.
The strength of non-oil was only partly due

Economic Performance Index (EPI)

Country
Abu Dhabi
China
Germany
India
Singapore
United States

2008
1.02
0.97
0.89
0.79
1.00
0.84

2009
0.70
1.02
0.83
0.79
0.95
0.77

2010
0.98
1.00
0.90
0.85
1.08
0.80

2011
1.09
0.97
0.92
0.82
1.00
0.79

2012
1.17
0.98
0.91
0.80
0.97
0.83

2013
1.13
0.98
0.91
0.83
1.00
0.87

2014
1.03
0.98
0.94
0.88
0.99
0.89

Notes: The Economic Performance Index (EPI): an Intuitive Indicator for Assessing a Countrys
Economic Performance Dynamics in an Historical Perspective, IMF Working Paper 13/214.
Source: SCAD, IHS, Khramov/Lee (2013) IMF Working Paper 13/214 2016 Abu Dhabi Chamber of Commerce & Industry

to private-sector activities, with the public

sector and especially the so-called shared
sector providing the bulk of momentum.

Uneven private-sector demand

The strong and stable headline growth

rate veils a bumpier path for consumer
spending, investment, and exports, though.
Private-sector consumption in particular
showed high volatility during these boom
years, and even times of recession. A
steep downturn in 2012 was followed by a
modest recovery in 2013, but then again
a mild recession was registered for 2014
(according to data for the entire UAE
economy, of which Abu Dhabis economy
accounts for two-thirds).
Stable government consumption mostly
compensated for that, though. Combined
with investment spending and, at least
until 2013, strong oil exports, government
spending ensured that Abu Dhabis
economy was able to outpace most of
its peers in recent years. In fact, the
government sector, the health industry, and
the social sector were the fastest growing
parts of the economy in the five years to
2014, followed by finance and insurance,
transport, accommodation/food services,
and real estate.

Remarkable real estate boom

Real estate has emerged as one of the

top-five sectors of the non-oil economys
sector ranking. Construction, with a high

Real GDP 2007 prices, % change

10%
8%
6%
4%
2%
0%
-2%
-4%
-6%

2008

2009

Total GDP

Non-oil GDP

2010

2011

2012

2013

2014

Source: SCAD 2016 Abu Dhabi Chamber of Commerce & Industry

2016 Abu Dhabi Chamber of Commerce & Industry

BADER REPORT|January 2016

Narrow manufacturing base

Economic Performance Index (EPI)

Manufacturing, which is important for

diversifying the export base of Abu Dhabi
away from hydrocarbons, has maintained
an almost stable share of the economy of
around 5.5% since 2010. Still, it should be
kept in mind that manufacturing rests mainly
on two pillars only, which are petrochemical
and metals production. Manufacturing of
metals plays a minor role, being dwarfed by
the chemical segment.

1.2

1.0

0.8

Global headwinds
0.6

2008

2009

Abu Dhabi

2010

China

2011

Germany

2012
India

2013
Singapore

2014
United States

Source: SCAD, IHS, Khramov/Lee (2013) IMF Working Paper 13/214 2016 Abu Dhabi Chamber of Commerce & Industry

Abu Dhabi leading Economic

Performance Index (EPI)

Global headwinds
slow down the
economy, but a
recession is not in
the cards

share of private-sector activities, tops the

list, albeit performing not quite as strong as
the rest of the economy. More remarkable
still has been finance and insurance, which
posted a 55% bounce in 2014 following
sizable growth rates the years before,
leapfrogging the sector to second place after
construction.
Clearly, this reflects the ongoing investment
boom in Abu Dhabi and vindicates the
emirates current five-year plan, which has
financial services and insurance as one out of
five strategic sectorswith a particular policy
focus to develop these sectors. Tourism,
transport and logistics, manufacturing, and
media are the other strategic sectors. (see
table 3 below)

6.7%

Production had embarked on a weaker performance

already in the second half of 2014, but output fell
6.7% on the year in the second quarter

Favorable global conditions eventually gave

way to a more challenging climate in 2014
and 2015. The recent weakness of many
emerging markets and the decline in oil
prices to less than USD50 per barrel from a
high of USD115 in June 2014 have spelled
a more difficult global environment for the
emirates businesses to operate in 2015.
The steep fall of oil prices and the key role
of oil production for Abu Dhabis economy
have forced goods exports to decline, trade
balances to weaken, and a more sizable
government deficit to ensue. Still, growth
estimates show Abu Dhabi has still been
growing faster than most of its peers and
certainly faster than the economies of the
G7. (see chart page 5, bottom)

A slowdown, but not a recession

Business results for 2015 have signaled

only a modest slowdown in the first half
of 2015. Early warning signals have been
emerging that point toward a sharper
slowdown in the third quarter. That
slowdown is likely to extend to the rest of
the year and 2016 as well.
The purchasing managers index (PMI)
for the United Arab Emirates still signaled
a solid expansion for the third quarter
(according to Markit), having weakened
from a stellar performance in 2014. New
export orders for United Arab Emirates
have declined in September for the first
time since 2010, while new orders in
general have remained rock solid in the

Strategic sectors of Abu Dhabis five-year plan

Leading
Tourism
Transport and logistics
Manufacturing
Media
Financial services and insurance

Supporting
Power and utilities
Information and communications technology
Construction and real estate
Education
Health care
Source: Abu Dhabi Five-Year Economic Plan 2014-2018 2016 Abu Dhabi Chamber of Commerce & Industry

2016 Abu Dhabi Chamber of Commerce & Industry

third quarter, which is perfectly in line

with the overall assessment of a strong
domestic economy being softened
from regional and global markets to an
increasing extent.
Abu Dhabis industry output has been on
a downward trajectory again in the second
quarter of 2015. Production had embarked
on a weaker performance already in
the second half of 2014, but output fell
6.7% on the year in the second quarter,
according to the Statistics Center of Abu
Dhabi (SCAD).
Abu Dhabis petrochemical complex
accounted for more than half of industry
output in the second quarter, while metals
production contributed around 15% and
nonmetallic mineral products another 10%.
Petrochemical output declined moderately
in the second quarter, making it the prime
weakening force for the industry sector as
a whole. The softer global climate has been
reflected here, which will hardly mend in the
short term.

Benchmarking economic
performance

The recent bout of global risks aside, Abu

Dhabis economic performance over the
last decade has been truly remarkable
Furthermore, the economy has grown
more resilient against shocks over time.
A simple but powerful analytical tool puts
that on display.
The concept of the Economic
Performance Index (EPI), which was
developed by two International Monetary
Fund (IMF) staff members (Khramov
and Lee), condenses headline growth,
fiscal stance, price inflation, and the

Sector share
60%
50%
40%
30%
20%
10%
0%

2008
Oil

2009

2010

2011

2012

2013

2014

Non-oil
Source: SCAD 2016 Abu Dhabi Chamber of Commerce & Industry

unemployment rate into but one single time

series index. According to the EPI, Abu
Dhabi has performed better compared with
nearly all of its peers and key industrial
countries as well as major emerging markets
for all but two of the last seven years.

Diversification
strategy made
good progress

Abu Dhabi leading

The higher the index, the better the

economic performance. For Abu Dhabi, the
index dipped below the mark of 1.00, which
signals normal economic performance,
with all key economic variables being
on target, only in 2009 and 2010 as the
global recession struck. Since then, Abu
Dhabi has recovered remarkably and
outperformed its peers. (see table page 3
and chart top left)

Real GDP growth %

20%

15%

10%

5%

0%

2010
Abu Dhabi

2011
China

Germany

2012
India

2013
Singapore

2014

United States

Source: IHS, SCAD 2016 Abu Dhabi Chamber of Commerce & Industry

2016 Abu Dhabi Chamber of Commerce & Industry

BADER REPORT|January 2016

Private sector share

60%
50%
40%
30%
20%
10%
0%

2010
Total economy

Private sector is
supported by a
whole range of
initiatives,
especially for
SMEs

2011
Non-oil

2012

Source: SCAD/Bain 2016 Abu Dhabi Chamber of Commerce & Industry

India has had similar or higher growth

than Abu Dhabi, but higher price inflation,
higher unemployment, and a weaker
fiscal balance. A weaker fiscal balance
has counted unfavorably for China too
in comparison to Abu Dhabi. Chinas
performance, however, was close to target,
much like Singapores.
The combination of high growth, a stable
monetary environment with moderate price
inflation, and a huge budget surplus has
ensured that favorable performance. With
growth slowing in 2015, and the budget
surplus dwindling, the EPI is bound to
soften for Abu Dhabi, yet it will still remain
above or close to the normal value of
1.00 unless an even more severe shock

from oil markets or a global recession hits

the country again. However, despite the
weakness of emerging markets, a global
recession is not in the cards at this point.
High, resource-sector driven growth
provides multiple challenges of its own and
creates a potentially massive issue for long
term sustainable economic development.
Abu Dhabi has therefore defined long term
strategic goals to wean Abu Dhabi off its
dependence on oil and strengthen the nonoil economy, including the private sector.
It is here where a more mixed picture has
emerged in recent years, and although
the non-oil economy grew faster than the
oil sector, this was more driven by the
government than the private sector.

Private sectors role

in Abu Dhabi

Even so, Abu Dhabis private sector has

been fairly resilient in the face of the less
benign global circumstances. Whereas
the UAE as a whole suffered the blow of
a steep recession in 2008/2009 when the
combination of the global financial crisis
and the related oil price fall hit, the UAE as
a whole and Abu Dhabi in particular have
weathered the recent oil price downturn
much better. Softening headline growth is
in the cards, but a recession is apparently
not around the corner.
This is partly because the Emirates
economy 2015 is different from 2008
vintage. As the strategy to diversify the
economy has been implemented step by
step during the last several years, the
economy as a whole stands on a more
solid footing. (see chart page 5, top)

Private sector share 2012

100%
80%
60%
40%
20%
0%

Manufacturing

Transport and logistics

Health care

Education

Financial services and insurance

Media and information and communications technology

Tourism

Construction and real estate

Source: SCAD/Bain 2016 Abu Dhabi Chamber of Commerce & Industry

2016 Abu Dhabi Chamber of Commerce & Industry

29%

Real estate's share in fixed investment

25%

The shared sector, which includes mixed ownership

businesses between the government and private
sector entities, grew by 29% on average between
2010 and 2012.

20%
15%
10%
5%
0%

2010

2014
Source: SCAD 2016 Abu Dhabi Chamber of Commerce & Industry

10%

Non-oil economy grew by 10% on average between

2010 and 2012, whilst the private sector actually
declined by 1% on average.

Private sector
development
softened by
comparably low
wages relative to
the rest of the
economy

Less dependent on oil

Take a look at the structure of the economy

now and then (Bar chart on oil/non-oil
share of the economy, 2008 and 2014).
Oil production still is the most important
generator of income for the Emirate of Abu
Dhabi, but its share in GDP has declined
from 59% in 2008 to 51% in 2014 as growth
in non-oil outpaced the oil sector. Other
sectors have flourished, too, including
those in which private sector activities play
a role. (see chart page 6, top left)

but private sector share declined

Yet the private sectors share of GDP

has declined, according to data from the
Statistics Centre of Abu Dhabi (SCAD).
For the entire economy of Abu Dhabi, the
share of the private sector sagged from
26% down to 18% between 2010 and 2012.
Looking at the non-oil economy only, the
private sectors share dropped from 52%
to 42% at the same time. Moreover, while
the entire non-oil economy grew by 10%
on average between 2010 and 2012, the
private sector actually declined by 1% on
average. The gap to the public sector nonoil economy widened significantly during
these years.

Public sector activity grew solidly during

these years, but the most outstanding
development was registered for the socalled shared sector, which includes
mixed ownership businesses between the
government and private sector entities and
which grew by 29% on average between
2010 and 2012. Foreign-owned business
expanded their share as well, albeit from
a lower level, and registered 27% average
growth. (see bottom chart page 6)
These trends have hardly been reversed
more recently. Private sector activities
are concentrated in but a small number of
branches. Only construction and tourism,
with 62% and 88% of total activities, are
dominated by private sector activities.
Moreover, shared sector activities play the
critical role in financial services, transport
and logistics, media and ICT, and, to a
lesser degree, in manufacturing. That being
said, construction and, in second place,
financial services are the largest sectors as
regards share in GDP.
That being said, shared sector activities
like public-private partnerships (PPP)
can be a smart path to bring in introduce
private sector-activity while distributing
risks and costs between public and private
partners. In any case, a reasonably level
playing field between public and private
companies is critical.
The private sector has hardly been able
to regain a higher share of the economy
in the years since 2012 though. While
Abu Dhabis economy grew by 4.6% on
average in 2013 and 2014, construction
as the most important private sector
edged up a more modest 1.9%. Tourism,
which is best proxied by food services and
accommodation, leaped 10.3% in 2013 but
was all but unchanged in 2014.

Finance sector outperforms

Financial services, by contrast, had a

real bumper performance in both 2013
and 2014. In the latter year, financial
services alone accounted for two thirds
of GDP growth of the entire economy
and accounted for nearly all growth in
the non-oil sector. The Abu Dhabi Global

2016 Abu Dhabi Chamber of Commerce & Industry

BADER REPORT|January 2016

Consumer price inflation

15%
12%
9%
6%
3%
0%

2008

2009

2010

2011

2012

2013

2014

August 2015

Source: SCAD 2016 Abu Dhabi Chamber of Commerce & Industry

Despite high
overall wage gains,
private sector
consumption lags
headline growth

Market, which is scheduled to open

shortly, will facilitate further financial sector
development and ensure high sector growth.
The bulk share of activities in financial
services are related to the shared sector,
while only 18% of activities were private.
Diversifying the economy away from
hydrocarbons has made progress during the
last several years, yet much of that progress
was driven by the government or state
sector entities.
Many initiatives have supported private
sector development. Small and mediumsized enterprises (SME) have attracted
special focus in Abu Dhabis strategy,
including legal provisions for awarding SME
a certain share of government contracts.
Moreover, SMEs gatherings and training
sessions have been organized by the Abu
Dhabi Chamber of Commerce and Industry
(ADCCI). Other key initiatives included the
Franchising Organization for Abu Dhabi,
and opening representative offices in key
foreign markets.
While broadening the basis for the
economy and diversifying it away from
hydrocarbons indeed, the private sectors
role will continue to deserve special
attention. Part of the effort will have to be
focused on productivity and remuneration in
the private sector.

Private sector productivity

and public sector pay

In terms of jobs, the private sector can claim

a much larger share relative to the public
sector, since nearly two thirds of all jobs are
in the private sector. That share has been
declining between 2010 and 2012, however,
dropping from 68% to 63%.
That points to a large private sector

2016 Abu Dhabi Chamber of Commerce & Industry

workforce, almost all of which is foreign.

Nationals account for only 1% of private
sector jobs. The flipside of the high number
of private sector jobs relative to private
sector GDP is that labor productivity in the
private sector is much lower compared to
the public sector. This is hardly surprising,
since private sector jobs are dominating
primarily in service industries with low value
add, while public sector jobs are in high
value added industries.

Lower wages in the private sector

For example, average compensation per

employee in construction is less than half the
value for the entire economy. In the case of
food services and accommodation, wages
are 10% below Abu Dhabis average.
Tourism, which may be proxied with
food services and accommodation, is one
of the five strategic sectors as defined by
Abu Dhabis five year economic plan. The
other four sectors transport and logistics,
manufacturing, media, and financial services
and insurance have higher-than-average
wages, with the exception of manufacturing.
Investment Geared Toward Real Estate
The private sector has claimed growing
clout in investment spending of the non-oil
economy between 2010 and 2012, but the
share of investment still remained below its
actual share in GDP. Again, this is partly a
legacy of the relatively low capital intensity
of private sector businesses services
usually require much less capital investment
than ventures in heavy industries.
Important structural shifts in Abu Dhabis
investment spending have occurred over
the last five years. The real estate boom
figures prominently, with the sectors share
in fixed investment spending rising from

6.6% in 2010 to 20.7% in 2014, a remarkable

surge. Transport and logistics also clawed
back some share in investment, while
manufacturing and the mining sectors
investment shares declined.
(see chart page 7)
This pattern has likely been maintained
until recently. Real estate development,
driven by robust demand in both residential
and non-residential, and related rental price
trends, has been favorable in the year to
date. Investment in other sectors of the
economy, most notably perhaps in the oil
sectors, is bound to weaken as oil prices are
expected to stay relatively low.

Credit conditions on
a gradual recovery

Lending growth picked up further

momentum through 2014, falling more in line
with other financial and monetary indicators
that reflect improvements in the banking
sector, but should see some moderation
in 2015, given the growth slowdown of the
economy in general.
Deposit growth has accelerated more
markedly than credit growth, leading to
lower loan-to-deposit ratios and interbank
rates, now at historical lows. The one-month
EIBOR interbank rate dropped to 0.39% at
end-2014, compared with 0.46% at end2013 and 0.80% in 2012.
Meanwhile, deleveraging has shown
signs of winding down, with provisioning
of nonperforming loans easing. Lending

+95%

Private sector consumption has seen high volatility

in the last five years, despite solid wage growth
in nearly all major sectors, although total labor
compensation, the key driver of household income,
was nearly double as high in 2014 as in 2009.

conditions should continue to improve, with

banks balance sheets looking healthier, but
should follow a more prudent path in light
of stricter regulatory measures regarding
lending practices.

Weak private consumption

Private sector consumption has seen high

volatility in the last five years, despite solid
wage growth in nearly all major sectors,
although total labor compensation, the key
driver of household income, was nearly
double as high in 2014 as in 2009 (+95%),
while the economy leaped by only 77% in
nominal terms. IHS estimates based on data
from the United Arab Emirates National
Bureau of Statistics show that private
consumption in real terms has barely grown
between 2014 and 2009/2010 after all.

Growth-driving
forces will shift
more toward
strategic sectors

Reluctance to spend

Against the background of high real wage

gains, though, the reluctance to spend
on consumption has been mirrored by

Share of non-oil exports

50%

40%

30%

20%

10%

0%

Saudi Arabia
2013

China
2014

India

Qatar

Singapore

Oman

Source: SCAD 2016 Abu Dhabi Chamber of Commerce & Industry

2016 Abu Dhabi Chamber of Commerce & Industry

BADER REPORT|January 2016

Abu Dhabi's sectoral leaders and laggards, average growth 2013-2014

35%

TOP FIVE

30%

BOTTOM FIVE

25%
20%
15%
10%
5%
0%

-5%
1
2
3
4
5

Financial and insurance

Human health and social work
Public administration and defense
Transportation and storage
Wholesale and retail trade

6
6
7

7
Total economy
Total non-oil

8
8
9
10
11
12

10

11

12

Real estate
Mining and quarrying (includes crude oil and natural gas)
Professional, scientific, and technical
Construction
Agriculture, forestry, and fishing
Source: SCAD 2016 Abu Dhabi Chamber of Commerce & Industry

high private sector savings rates. The

large capital account deficit has been the
downside of that, signaling that outbound
investment has apparently dwarfed
investment in the Emirate. Furthermore,
expat workers have also likely increased
remittances flows. Even more broad-based
growth could be achieved if those patterns
were weakened or even reversed.

Subsidies push, food dampens

price inflation

Price trends might have played some role

for weak spending, but in general price
inflation has been moderate, accelerating
only recently as subsidies have been
phased out. Consumer inflation in Abu
Dhabi remained elevated during the first
half of the year as price pressures from
the utility subsidy cuts in early 2015
continued to keep overall housing costs
high. Headline inflation has faced added
pressure as the government moved to
eliminate fuel subsidies starting in August.
(see chart page 8)
Monthly price inflation hit 6.1% in that
month, the highest rate in seven years, up
from an annual average of 3.2% in 2014.
However, food price inflation has been
muted given the sharply lower international
food prices, partly compensating for effects
on inflation from the subsidy-phase out.

Non-oil exports leap six-fold

Non-oil exports from the Emirate of Abu

Dhabi have been surging during the last
decade. Within the ten years from 2005, the

10

total value of exports grew six-fold. However,

non-oil exports started off a very low base
level compared to the value of oil exports.
Non-oil-shipments are still dwarfed by oil
exports, despite the phenomenal bounce
of the last several years. For every Dirham
of oil that is exported, but six Fils of non-oil
exports are shipped.
The gap in value terms between oil and
non-oil exports still remains. It has narrowed
in 2015 as oil prices are still lower on
average compared to 2014, but it will hardly
close any time soon.

Regional neighbors and

large Asian markets

Abu Dhabis non-oil exports are strongly

geared toward its neighbors in the Gulf
region, with Saudi Arabia being the largest
recipient of non-oil exports from Abu Dhabi,
accounting for between 27% and 41% of nonoil exports in 2013 and 2014. China, India,
Qatar and Singapore are following with much
smaller shares. (see chart page 9)
The geography of Abu Dhabis trade
routes signals a developed weakness
toward emerging markets and their softening
economies, at least as far as China and
Singapore are concerned, and the impact
of lower oil prices, which will affect the
Gulf region in particular. With the possible
exception of India, exports to regions
which are currently still growing solidly are
relatively rare.
This leaves the non-oil export sector
vulnerable against global economic risks.
Moreover, softening currencies of key

2016 Abu Dhabi Chamber of Commerce & Industry

For every Dirham of oil that

is exported, six Fils of non-oil
exports are shipped.

trading partners, especially in East Asia, will

adversely impact on non-oil competitiveness.
A stronger U.S. dollar would further aggravate
the situation. A prolonged weakness of
emerging markets and low oil prices might
therefore have negative repercussions for the
non-oil sector of the Abu Dhabi economy and
manufacturing in particular in the short run.
In the longer run, a softer oil price might
even support diversification of the economy
as wage and price pressures would ease,
though. The international competitiveness
of Abu Dhabis non-oil sectors would benefit
from that.

Outlook for stable albeit

slower growth

Inflationary pressures are likely to remain

moderate given the weaker global
commodity prices, while UAE authorities
are expected to maintain the dirhams
current dollar peg. The Central Bank of the
UAE is expected to follow cues from the
US Federal Reserve over the coming year
regarding tightening monetary policy, which
is likely to commence around late 2015.
Taking a longer view, a combination of
sound economic policy, a stabilization of
oil prices, abundant fiscal and financial
resources, improvements to infrastructure,
and political stability will support the
Emirate of Abu Dhabis and the UAEs
economic risk profile as a whole.
The corporate sector as a whole
made progress over the past year on
debt obligations and deleveraging, while
successful debt issuances have signaled
positive investor sentiment towards
local firms and the countrys economic
prospects. Moreover, the government
has pushed for greater regulatory reform
and legal transparency in recent years,
as well as funneled fiscal resources into
infrastructure and education to boost its
long-term growth prospects.

Strategic sectors bound

to drive growth

The economys expansion will primarily

be driven by the non-oil sectors,
including construction, manufacturing,
transshipment, and financial service
industries. The UAEs liberal and marketoriented economic policies have attracted
a large number of international firms to the
construction and services sectors. Over
the medium term, we expect the inflow
of foreign investment to continue, as it
will shift from Dubai to other major urban
centers such as Abu Dhabi.
Tourist activity has also been influenced

Abu Dhabi top 5 non-oil export

commodities 2014, million AED

Total exports

18,964 m
Base metals and articles of base metals
Plastics, rubber and articles thereof
Machinery, sound recorder, reproducers and parts
Products of the chemical and allied industries
Articles of stone, mica; ceramic products and glass
Rest
Source: SCAD 2016 Abu Dhabi Chamber of Commerce & Industry

by weaker external demand, given Russias

economic troubles and ongoing Eurozone
concerns, but the overall outlook remains
favorable, given the UAEs safe-haven
status and several new attractions for highend cultural tourism. Risks to the economic
outlook continue to revolve around regional
geopolitical developments and global
economic conditions, with the recent swoon
in large emerging markets an added worry
for near-term prospects.
One of the important factors that will
contribute to long-term growth is the
large-volume fiscal resources that are
currently being spent on infrastructure
and education. Both federal and emirate
governments are investing in the expansion
of the countrys roads and the development
of rail transportation.
The modern infrastructure will play
a critical role for the diversification
of the economy and the sustained
development of a strong private sector.
The UAE already has developed a modern
telecommunication system, and it currently
enjoys one of the highest telephone and
Internet usage rates in the Middle East.

2016 Abu Dhabi Chamber of Commerce & Industry

11

Contacts
IHS Global GmbH,
Bleichstrasse 1, 60313 Frankfurt, Germany

Abu Dhabi Chamber of Commerce & Industry,

P.O. Box 662, Abu Dhabi, U.A.E.

Ralf Wiegert
Director Consulting IHS Economics & Country Risk
Ralf.Wiegert@ihs.com
+49 (0)69 20973 320
+49 (0)151 42628 143

Ohan S Balian, Ph.D.

Chief Economist Abu Dhabi Chamber of Commerce &
Industry
o.balian@adcci.gov.ae
www.abudhabichamber.ae
+971 2 617 7470

Matthias Herles
Director Consulting IHS Economics & Country Risk
Matthias.Herles@ihs.com
+49 (0)69 20973 218
+49 (0)174 1946560

About IHS:

www.ihs.com

IHS (NYSE: IHS) is the leading source of information, insight and analytics in critical areas that shape todays business landscape.
Businesses and governments in more than 165 countries around the globe rely on the comprehensive content, expert independent
analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence.
IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005.
Headquartered in Englewood, Colorado, USA, IHS is committed to sustainable, profitable growth and employs approximately
9,000 people in 31 countries around the world.

Address:Main Building of Abu Dhabi Chamber, Corniche Road, P.O.Box:662

Phone:00971-2-6214000, Email:contact.us@adcci.gov.ae

w w w.abudhabichamber.ae



.


.
.


.


.
.

.



2015.

.




.



.

.


.


.

2014

18,964

)(

:

2016

.




.


.


.

.


.

2016

11

 ( |)Bader 2016

2014-2013

%35

%30
%25
%20
%15
%10
%5

12
1
2
3
4
5

11

10

8
6
7

.


2015
.

( . )8
%6.1

%3.2
.2014


.

.
2005

10

2016

%5-

8
9 ) (
10
11
12
:

.

.
.

%0

.


.

.

.
2015

2014

%27%41
2013 .2014

.
( )9




.

2016



.
( )7
.



.


.

%95+

2014 .2009

2014


2015
.
2014 2009

( )%95+ " %77"

. IHS

.

( )EIBOR %0.39

2014 %0.46
2014 2010/2009
2013 %0.80 .2012
.


.



.

50%

%40

%30

%20

%10

2013

2014

%0

2016

2016

 ( |)Bader 2016

%15
%12
%9
%6
%3

2015

2014

2013

2012

2011

2010

2009
:

2016

.

%18 .


.

.



.


.

.



.
.

2008

%0

2016

.



.

.

%10 .



. :


.


2010
2012
.


-
.
.

2010 2012 %68 .%63

.

. %1
%6.6 2010 %20.7
.

.
2014


%25
%20
%15
%10
%5

2014

%0

2010
:

2016

%10

%10
2010 2012 %1
.

...

( /
2008 )2014


%59 2008 %51 2014
.

.
( )6

...

.

%26 %18
2010 .2012

%52 %42 .

%10
20102012
%1

%29

%29 2010.2012

.
.




%29
2010 .2012

%27
( . .)6
.
.

%62 %88 .



.

.



.

.


.2012
%4.6 2013
2014
""
.%1.9
%10.3
2013 .2014

- -
2013 .2014


.

2016

 ( |)Bader 2016

%60
%50
%40
%30
%20
%10

2012

2011

: Bain/

%0

2010

62015

.

.



.


.


.

.


.
2009/2008

.


.


.


.
. 2015


2015 .2008

1.00

"" ( . )5

2012
%100
%80
%60
%40
%20
%0

: Bain/

2016

2016




.

.2015

2014 %6.7

(.)SCAD


%15
.%10


.
.

.
.

( )

.


.

%60
%50
%40
%30
%20
%10
2013

2014

2012

2010

2011

2009

2008

%0

.
1.00
""
" "
2009 2010
.

( . 3
)4

2016

%
%20

%15

%10

%05

2014

2013

2012

2011

2010

%0

: IHS

2016

2016

 ( |)Bader 2016

)(EPI
1.2

1.0

0.8

%5.5 .2010


.
.

2014

2013

2012

2011

2010

2009

: IHS/ ) (2013 2014/13

2008

0.6

2016

.

.

%55
2014

.




.

.
( )

%6.7

2014
%6.7 .

2014 .2015

50
115 2014

.2015



.


.
( )5

2015

.2015
.

.2016
()PMI

( )

.
2014

2010

: 2016 2018-2014

2016

%6
2010 .2014

`

( .
)

%6.4
.

.

2008

1.02

0.97

0.89

0.79

1.00

0.84

2009
0.70
1.02
0.83
0.79
0.95
0.77

2010
0.98
1.00
0.90
0.85
1.08
0.80

2011
1.09
0.97
0.92
0.82
1.00
0.79

2013
1.13
0.98
0.91
0.83
1.00
0.87

2012
1.17
0.98
0.91
0.80
0.97
0.83

2014
1.03
0.98
0.94
0.88
0.99
0.89

.


.

2013
2012

2014
(
).

.
2013 -
.



2014
/ .

: ( :)EPI
.214/13
: IHS/ ( )2013 2014/13

"".

2016

2007 %
%10
%8
%6
%4
%2
%0
%2%42014

2013

2012

2011

2010

2009
:

2008

%6-

2016

2016

 ( |)Bader 2016

IHS
.
.


.
.

.

.
.
.

.

.


. IHS
.

.

2015

.
:


.662 :
+ 971 2 6214000 :
+ 971 2 6215867 :
contact.us@adcci.gov.ae :
8:00 3:00 - ( -)

www.abudhabichamber.ae

2016

www.linkedin.com/company/abu-dhabi-chamber

www.abudhabichamber.ae

Bader


2016

www.ihs.com