- About Us
- What We Do
- News & Press
- Reach Us
Abu Dhabi’s GDP is expected to see a modest growth from 2021 and will reach 2019 levels in 2023 on the back of improving domestic demand and rising oil production and prices, global ratings agency S&P said on Tuesday.
It said the UAE capital’s fiscal positions also remain strong over the next two years and the emirate’s population will also increase in the wake of Covid-19 pandemic.
“We expect regional geopolitical tensions will, on balance, have a limited impact on Abu Dhabi, and we also expect continued domestic stability,” said Trevor Cullinan, primary credit analyst at S&P.
“We estimate Abu Dhabi’s GDP per capita at $98,000 (Dh360,000) in 2021. This per capita figure is supported by our estimate of a contraction in Abu Dhabi’s population over 2018-2020 by more than 16 per cent. The population has declined owing to relatively weak economic activity in recent years and the restructuring and consolidation of several GREs (government-related entities),” S&P analyst said in a note released on Tuesday.
“We expect the population will increase by about two per cent annually over the period to 2024 as domestic demand and investment pick-up after the sharp contraction in 2020.”
S&P expects oil production of Abu Dhabi will return to the 2019 level by 2024. Abu Dhabi’s oil production declined to an average of 2.8 million barrels per day (bpd) in 2020, from 3.1 million in 2019.
“As a result, we project hydrocarbon sector growth of about 2.7 per cent annually over the forecast period. The non-oil sector should increase by about 1.7 per cent annually, an acceleration in the pace of growth relative to the years prior to the pandemic, fueled by government and GRE investment programmes,” said Cullinan.
State-owned oil producer Abu Dhabi National Oil Co. (Adnoc) has announced investments of around $121 billion between 2021-2025 , which is close to 10 per cent of GDP.
Oil prices rose to $70 on Tuesday as optimism grew over the fuel demand outlook during the summer driving season of the US.
“We assume an average Brent oil price of $60 per barrel for the remainder of 2021 and also for 2022, with our longer-term oil price assumption falling to $55 for 2023 and beyond,”S&P said.