A 20-year period of fiscal deficits in the UAE’s consolidated government financial accounts came to an end in 2005 when posted a Dh38.2 billion surplus.

The country’s impressive economic performance during the year led to a GDP growth rate of 25.6 per cent at current prices, while real GDP growth is estimated at 8.2 per cent. Key factors were the strong oil market, active development of public joint stock companies, increased involvement of free zones and buoyant local stock markets, together with launches of a number significant new projects.

Government investment in education, health and social services boosted the government services sector to 11.1 per cent of non-GDP; and infrastructural projects involving transportation, storage and communications contributed 10.4 per cent.

This economic growth has been fostered, in part at least, by the removal of barriers to trade and the creation of a relatively liberal business environment. The focus has been on how to help business develop while maintaining good standards of corporate governance. State ownership has played a key role in development of certain sectors, but in recent years there have been moves to reduce this role through a series of privatisation and partnership.

Astute economic policies provided solid foundations for impressive growth in all sectors. According to the Ministry of Economy and the Central Bank, the non-oil sector accounted for 64 per cent of nominal GDP (73 per cent of real GDP), rising by 19 per cent to Dh312 billion, compared to Dh263 billion in 2004.

Diversification of the UAE’s economy will continue to play a vital role in maintaining growth and stabilising the impact of oil production or price fluctuations. Continued efforts will be made to attract foreign direct investment, and indications are that these efforts will continue to bear fruit, becoming increasingly significant contributors to economic growth.

Tourism, media, shipping, financial and commercial services, and manufacturing and industry all contribute to the economic expansion of the seven emirates that comprise the UAE.