UAE on ‘right track’ to reduce oil reliance: Al Mansouri

Minister maintains optimism on 2016 economy despite oil slump

9 December 2015

Abu Dhabi: The UAE is on the right track to reducing its reliance on oil, which is expected to account for 20 per cent of the country’s gross domestic product (GDP) by 2025, according to Sultan Bin Saeed Al Mansouri, Minister of Economy.

In 2014, oil accounted for 30 per cent of the UAE’s economy, the minister said as he reiterated his optimism for 2016 despite the continued fall of oil prices, which dropped five per cent to $38 a barrel during trade on Monday.

In 2014, the UAE’s GDP grew 4.6 per cent, reaching Dh1.47 trillion, with the year marking the country’s best economic performance in the past 44 years. While the Minister said he expected 2016 to be slower, he said the country’s economy will continue to grow.

“My optimism for the UAE’s economy in 2016 comes from knowing that we’ve been through such cycles before, and we were able to overcome them and grow past them. I’m optimistic about 2016 and seeing positive growth then,” Al Mansouri said.

The Minister was speaking on Tuesday at the third UAE Economic Outlook Forum, which runs until December 9 in Abu Dhabi.

In its efforts to diversify the economy away from oil, the UAE aims to see increased economic contribution from Small and Medium Enterprises (SMEs) — a sector that accounted for 60 per cent of the UAE’s non-oil GDP in 2014. Al Mansouri said the government was looking at ways to raise the figure to 70 per cent by 2021.

The UAE also aims to see a five per cent contribution by 2021 from the innovation sector.

“We admit that there are other countries that excelled in fields of innovation and knowledge … and we are in talks with countries in North America, Europe, and Asia about collaborations in order to boost our knowledge economy,” he said, adding that the UAE has invested over Dh300 billion in the fields of knowledge and innovation.

Al Mansouri further said that the industrial sector currently accounts for 14 per cent of GDP, with the figure expected to reach 20 per cent by 2025.

Also speaking at the event was Rashed Al Zaabi, acting executive director of planning and statistics at the Abu Dhabi Department of Economic Development, who said he expected Abu Dhabi’s average growth rate between 2015 and 2019 to be around “4.2 per cent”.

He added that Abu Dhabi’s non-oil sector alone is expected to grow “4.6 per cent in 2015 and 5.3 per cent in 2016”.

Al Zaabi noted that the emirate’s GDP reached Dh960.1 billion in 2014, marking a three per cent increase from the Dh931.8 billion recorded in 2013. Oil GDP dropped in 2014, however, to reach Dh489.7 billion — down from Dh511.9 billion in 2013.