Abu Dhabi non-oil imports down 10% in January
New official trade figures showed that non-oil imports into the UAE capital declined by 10 per cent in January to $10 billion, confirming that even Abu Dhabi is feeling the impact of the global economic slowdown.
Total non-oil foreign trade in January declined by a lesser four per cent to $15 billion as exports and re-exports actually grew by 21 per cent while imports declined.
Acting director general of the Federal Customs Authority Khalid Ali Al Bustani told Gulf News that this represented an ‘improvement in the balance of trade between the UAE and the outside world during the reviewed period’ and ‘highlights the growing competitiveness of UAE exports despite the repercussions of the global financial crisis’.
However, it is also undoubtedly true that the big drop in imports is also due to a slowdown in real estate and construction in Abu Dhabi, and falling consumer demand for big ticket items like automobiles.
It is something of a myth that Abu Dhabi has not been impacted by the global financial crisis. In particular the sudden stop and real estate crash in neighboring Dubai has impacted private sector construction projects. Credit has become more difficult, and off-plan property sales have dried up.
Not that the Abu Dhabi Government has slowed its expansion program. It is mainly the private sector that is feeling the downturn, although government hotels have seen revenues fall from the boom times.
The big question for this year will be how oil revenues hold up in Abu Dhabi. Last year saw a swift recovery in prices. There is the possibility of a double dip recession this year that would hit oil revenues again.
All the same, Abu Dhabi has huge reserves in its sovereign wealth funds and is one of the few nations of the world to have ample savings for a rainy day. It can also draw down funds to invest when other nations are unable to do so and when asset prices are down.
So whatever the trade figures tell us, and they are a reminder that Abu Dhabi is also a part of a globalized world, there is little cause for concern, unless you are an importer.