UAE non-oil growth picks up as exports rebound

The non-oil economy of the United Arab Emirates (UAE) strengthened as output rose at a sharper pace in the developing new export business, Dubai's Emirates NBD bank said Wednesday in a statement.

Increased new orders, improved economic conditions and marketing campaigns all contributed to output growth, said the lender.

The composite indicator designed to give an accurate overview of operating conditions in the non-oil private sector economy, the seasonally adjusted Emirates NBD UAE Purchasing Managers' Index (PMI), increased to 55.0 in Dec. from 54.2 in November.

Emirates NBD said this signals a significant healthy monthly improvement in the non-oil private sector, "and one that was the strongest since July," said Khatija Haque, Head of MENA Research at Emirates NBD.

"The Emirates NBD PMI indicates a solid expansion in the non-oil private sector in Q4 of 2016. Strong gains in output and new orders have been hard-won however, with firms continuing to offer discounts and promotions in order to secure orders," added Haque.

As for prices, another rise in input costs was registered but competitive measures and promotional offers decreased output prices.

The UAE's dirham currency is currently pegged in a fixed position against the U.S. dollar, hence the price of UAE goods increased for importers in the UK, Eurozone, China and elsewhere.

In November 2016 the greenback rose to the highest external value compared with major currencies since 2003.

China is major importer of chemical products from the Gulf states in particular.

"The Yuan devaluation in China has rendered imports more expensive. On the surface it could potentially lead to a decrease in affordability and therefore, a drop in imports," said Andrew Allan, Associate Director and analyst at the Standard and Poor Global Platts firm in December 2016.

During the first 10 months of 2016, China's overall imports of polymers decreased by about 5.4 percent year-on-year, Allan added.

Since 2014, China has been Dubai's biggest foreign trade partner.

source: Xinhua