Dubai, Aug 2 (IANS) A sharp rise in public and private investments helped the United Arab Emirates’ (UAE) real non-oil sector to grow by around 3.9 percent last year despite a slowdown in the second half because of the global financial crisis, WAM news agency reported Sunday.
From about 282.9 billion dirhams (about $77 billion) in 2007, the non-oil sector’s contribution to the country’s real gross domestic product (GDP) grew to nearly 294 billion dirhams (about $80 billion) in 2008, the economy ministry’s figures show.

Growth last year was slightly lower than in 2007, when the real non-oil GDP expanded by four percent.

Despite a sharp increase in the hydrocarbon sector because of higher output and prices, the non-oil sector remained the dominant component of the GDP, accounting for nearly 54.9 percent last year, the figures showed.

Unlike the oil sector, which has fluctuated over the past decade, the non-oil sector has recorded steady growth and experts said this was due to high investments and progress in diversification efforts.

“The non-oil sector is still partly influenced by the oil sector as it somewhat depends on how much the government spends,” said an economist at an Abu Dhabi-based bank.

“But this reliance is steadily declining thanks to ongoing efforts to achieve sustained growth and the fact that the private sector is now playing a much bigger role in the domestic economy.”

The figures showed domestic household services recorded the highest real growth of about 17 percent last year, followed by the oil and gas sectors, which surged by 12.1 percent mainly due to higher output.

Real growth was put at 6.7 percent in construction, six percent in the financial sector, 4.8 percent in government services, 4.5 percent in the manufacturing sector and around 3.2 percent in restaurants and hotels.

Other non-oil sectors recorded growth except the electricity and water sector, which slumped by about 2.1 percent, according to the ministry.

Its figures showed the gross fixed capital formation, which covers public and private investments, hit an all time high of 200.4 billion dirhams in 2008, an increase of nearly 35 percent over the 2007 investment of 148.5 billon dirhams.

A breakdown showed the manufacturing sector was the second largest contributor to the real GDP after the oil sector in 2008, with 66.5 billion dirhams, accounting for about 12.4 percent of the 535.3 billion dirhams of the GDP.

The oil sector stood at 241.3 billion dirhams while the value was put at 40.6 billion in trade, 40.1 billion in construction and 34.2 billion in government services.