June 2018

Gulf Industry Magazine helps you catch up with the numbers behind economic and industrial developments in the region.

UAE to see 2.1pc GDP growth: Moody’s

UAE is expected to record a GDP growth of 2.1 per cent in 2018 and 3.9 per cent in 2019, said Moody’s in a new report, adding that non-oil growth will recover in 2018-2021, supported by government spending after three years of cuts.

The UAE’s (Aa2 stable) credit profile reflects its financial support from Abu Dhabi, large hydrocarbon reserves and very high wealth levels, the report added.

“The UAE’s superior infrastructure, very high per capita income and vast hydrocarbon reserves support its creditworthiness,” said Thaddeus Best, a Moody’s analyst and co-author of the report. “These strengths are balanced against challenges which include limited institutional transparency and the absence of public data around offshore assets and some of the emirates› public finances.”

The UAE’s very high fiscal strength reflects the country’s record of large fiscal surpluses and build-up of very large financial assets in Abu Dhabi›s sovereign wealth fund (ADIA).

 As a result of Abu Dhabi’s fiscal consolidation and the recovery in oil prices, Moody’s expects the UAE’s consolidated government deficit to decrease to 0.8 per cent of GDP in 2018, from an expected 2.3 per cent in 2017. The UAE’s consolidated fiscal position shows a diverging path between Abu Dhabi, where broad spending cuts were enacted, and Dubai, which has continued to increase spending ahead of the World Expo 2020.


Turkey’s cosmetic exports to UAE at $21.7m

TURKEY’S cosmetic exports to the UAE stood at Dh80 million ($21.7 million) in 2017, which is approximately 3 per cent of its total global cosmetics exports, with its 100 per cent Halal certified products playing a key role, according to the Turkish Exporter’s Assembly (TiM).

Turkey’s thriving cosmetic and personal care industry has found a receptive market in the UAE, said a statement.

Since 2015, the Turkish cosmetics industry has seen an upward trend in export values with an average annual growth rate of 10 per cent, it said. Globally, Turkish personal care products exports reached $696 million in 2016 and are projected to cross $50 billion by 2023, it added. Key factors that have contributed to the success of the Turkish cosmetics industry in the UAE include their 100 per cent Halal certified products, quality ingredients and a diversified range, said a statement.


Global flat glass market to top $130bn

THE market for flat glass, which is extensively used in construction industry replacing conventional bricks, wood and stone, is poised for solid growth with its sales likely to surpass the $130-billion mark by 2024, said a report.

The positive outlook towards growth in infrastructural spending for building airports and residential buildings coupled with strict amendments regarding use of eco-friendly building materials will drive industry growth, according to a new research by Global Market Insights.

Strong outlook towards increase in automotive production meeting the global demand owing to rise in middle class income level and the consumer preference for luxury automobile is set to put the flat glass market on a smooth road with its demand likely to exceed 120 million ton by 2024, it stated.

Raw materials used in manufacturing flat glass include silica, limestone, soda ash and natural gas. Volatile raw material prices along with risk of procurement may challenge industry profitability thereby affecting flat glass market price trend.


Electric buses market to see 84pc growth

THE electrification of road transport will move into top gear in the second half of the 2020s, due to tumbling battery costs and larger-scale manufacturing, which will see sales of electric buses going up by 84 per cent in its respective global markets by 2030, said a report.

Additionally, the electric cars market will also see a rise of 28 per cent, added the report by the latest long-term forecast from Bloomberg New Energy Finance (BNEF).

The report shows sales of electric vehicles (EVs), increasing from a record 1.1 million worldwide last year to 11 million in 2025, and then surging to 30 million in 2030 as they establish cost advantage over internal combustion engine (ICE) cars.

China will lead this transition, with sales there accounting for almost 50 per cent of the global EV market in 2025 and 39 per cent in 2030. The number of ICE vehicles sold per year (gasoline or diesel) is expected to start declining in the mid-2020s, as EVs bite hard into their market.


Dubai non-oil sector growth slows down

DUBAI’S non-oil private sector growth slowed down in April, with the latest improvement in business conditions being the smallest since October 2016, said the latest Emirates NBD Dubai Economy Tracker Index.

Weaker momentum in the wholesale & retail and travel & tourism sectors was a key factor behind the overall slowdown.

The seasonally adjusted Emirates NBD Dubai Economy Tracker Index – a composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy – scored 53.9 in April, down from 55.3 in March. Nonetheless, the figure was indicative of a modest overall expansion.

Despite easing since the preceding survey period, travel & tourism remained the strongest performer (55.3), followed by construction (54.9) and wholesale & retail (53.5).

A reading of below 50.0 indicates that the non-oil private sector economy is generally declining; above 50.0, that it is generally expanding. A reading of 50.0 signals no change. The survey covers the Dubai non-oil private sector economy, with additional sector data published for travel & tourism, wholesale & retail and construction.


Abu Dhabi-Saudi trade hits $381m in January

ABU DHABI’S total trade with Saudi Arabia amounted to Dh1.4 billion ($381 million) during January, an increase of 3.7 per cent over the same month 2017, a media report said.

Saudi Arabia comes on top of Arab and Gulf countries with the largest trade volume with the Emirate of Abu Dhabi, accounting for around 11.3 per cent of the emirate›s total trade with all world countries during January, which is valued at Dh12.4 billion, reported Emirates news agency Wam, citing figures released by Statistics Centre - Abu Dhabi.

Market analysts attributed the bilateral trade growth to the privileged economic relations between the UAE and Saudi Arabia, especially following the formation of an ad hoc committee dedicated to the development of trade between the two sides, last year. Abu Dhabi’s total imports from Saudi Arabia amounted to Dh950 million during January, against Dh888 in the same month 2017. Re-exports between the two sides increased from Dh152 million to around Dh230 million during the same period.

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