Abu Dhabi Department of Economic Development, organized a discussion panel today at its headquarters to announce the results of six development indicators; namely, Consumer Confidence in Economic Performance in the Emirate of Abu Dhabi, National Family Conditions, Confidence in Business Climate, Demand Trends in labor Market, Industrial and financial Sectors Indices.40 people, representing a number of governmental and semi-governmental organizations, banks and and studies and research centers in Abu Dhabi, participated in the discussion panel.
Dhahi Al Mansouri, Acting Director of Studies, in an opening speech of the discussion panel, said that results of the development indicators that were derived from the 2012 opinion polls came to reflect the real situation in the economy of the Emirate of Abu Dhabi, based on the point of view of the public.Al Mansouri noted that these results confirmed the continued optimism in the performance of Abu Dhabi's economy despite the anxiety that permeated the world economy as a result of economic turmoil in Europe and the United States; particularly the policies of austerity and restraint exerted which greatly contributed to the atmosphere of uncertainty in the global economy.Al Mansouri said that the continued high oil prices and increasing revenues, contributed to the creation of a stable environment, full of optimism about the economy, reflected in the results of indicators through the year 2012, as government spending dramatically boosted optimism. The of the government effective administering of the economic activity under the crisis during the few past years, increased confidence in the capacity of the Government to overcome any external pressure.The panel was managed by Dr. Khaled Desouky the Economic Specialist in the Studies Directorate of the Department of Economic Development and Faisal Al Shehhi, Acting Head of the Development Indicators Section, during which they highlighted the Abu Dhabi economic indicators 2012 results, which largely reflected the beginning of real revival in the economy of the Emirate of Abu Dhabi, unlike most world economies. The highlighting emphasized that rising optimism among individuals and consumers in Abu Dhabi, was due mainly to the government spending in 2012, and the implementation of a number of major projects, that were postponed during the global financial crisis. Most markets have reached advanced stages of debugging after the global financial crisis; eventually leading to the acceleration of the performance of the Emirate's economy, the increased number of commercial licenses, the improvement of Abu Dhabi Securities Market index, the gradual improvement in real estate market and higher rates of employment compared to 2011. Optimism about the economic situation in general among individuals and consumers increased 7 points in 2012 compared to 2011. Confidence in economic facilities in the Emirate of Abu Dhabi in 2012 raised optimism level 2points up in comparison to 2011, as the index registered (55) and (53) points respectively on the 100 points scale, showing more optimism among business owners in Abu Dhabi. With regard to the general performance of the industrial sector, a slight decline of (0.9) points was detected in 2012 compared to 2011, which was attributed to the problems faced by the industrial sector at the level of developed world which overshadowed optimism levels especially in face of the blurry conditions which prevailed. Oil prices increased, as Abu Dhabi Murban crude oil price on average went up in 2012 to $113/barrel compared to $ 109.5/barrel on average in 2011. New commercial licenses, issued in Abu Dhabi registered an increase in 2012 compared to 2011. Concerning the National Family Conditions Observatory index, the discussion panel revealed that optimism among national families increased in 2012 compared to 2011, with the sense of improved financial conditions among national families, especially in the light of a combination of factors that had contributed to this feeling, particularly the high salaries paid by the federal government, the drop in prices of clothing during the sale season at beginning of the year, that continued for longer periods during the year. Among the reasons for the rise in optimism among families, were the policies adopted and the decision of his Highness Sheikh Khalifa bin Zayed Al Nahyan, to pay the debts of low-income nationals, which resulted in raising optimism among national families during the first quarter of 2012. The Trends of Demand in Labor Market index indicated that demand for labor during the first quarter of the year, was higher compared to the first quarter of 2011 in most economic activities; especially in manufacturing, wholesale and retail trade and repair of motor vehicles, hotels and restaurants, of financial intermediation and service activities in general, including education and health.
Some results also reflected positive changes in favor of national labor force, detected during the 2012 opinion polls, compared to previous years. The (qualifications and experience) factor was the most important factor from the point of view of economic establishments respondents. This was a clear evidence of improvement in the quality of national labor force and acquired scientific and technical skills that qualified them to become competitors of foreign workers in the labor market. The Financial Sector Performance Index, improved markedly during the first quarter of 2012, as it registered its highest level since the second quarter of 2011, recording 105 points in the first quarter of 2012, bringing by 5.6% compared to the last quarter of 2011 when it reached 99.4 points. In the second quarter of the year, the financial sector index dropped, being affected by a range of variables to registered 99.3 points, just shy of the levels achieved by the end of 2011.
The general improvement of the financial sector index, came during the first quarter of 2012 as a result of the improved performance of a number of its most important subsidiary indicators, and the decline in factors of negative impact, such as the inflation rate, the ratio of loans to deposits, the ratio of money supply to foreign reserve, the proportion of the size of the domestic credit to GDP plus the improvement in performance of a number of other subsidiary indicators with positive impact on the general index, which experienced significant increase. These included the price of oil, the rate of growth of capital and reserves, and the capital adequacy ratio and the Abu Dhabi Securities Market index. The discussion panel highlighted with more analysis, the global economic performance, which it described as characterized by weakness and fragility in 2012, due to the economic difficulties in many developed countries, which were a factor in the slower growth. The panel explained that despite the fact that all the expectations about prospects for the global economy were accompanied by some degree of optimism in future performance at the beginning of the year, but optimism dropped combined with a wait-and-see caution, especially in the economies of the developed world, as fiscal austerity policies weakened domestic demand, investment and employment, in addition to the continued weakness of the financial system and its lack of efficiency.The IMF stated in its World Economic Outlook report issued in April 2012, that some signals indicated continued weakness in recovery of the global economy, particularly in the light of mounting pressure from financial markets and sovereign pressures in the euro zone countries. The Fund's November report revealed that economic recovery experienced new setbacks in 2012, amid uncertainty as a result of the inability of developed economies until the end of the year to succeed in reducing the effects of problems, coupled with poor performance of the policies that failed to restore confidence and reduce the risks that were roiling investors, such as those associated with the continuity of the euro zone or the US fiscal policy errors. According to the Fund's forecasts updated and issued in November 2012, the global growth forecast of 3.3% in 2012 came to a decrease of 0.2% short of the Fund's forecast which was 3.5%, according to a report on global economic prospects in July, which expected continued slowdown in economic performance in developed economies, with relatively survival in many emerging economies and developing economies. The US economic growth for 2012 was predicted to be around 2.2% (Nov 2012 forecast). For the euro zone, November 2012 expectations for countries in the region estimated growth rate to register (-0.4%) affected by the economic performance of Italy, Greece and Spain. For countries like Japan, United Kingdom, Canada and other developed countries, the Fund's November 2012 forecast, expectations for economic growth rates, were lower than those of July 2012. At the level of emerging and developing economies, November 2012 forecast, predicted growth rates to drop from 5.6% to 5.3%. The Fund expected rates of growth in China's economy in 2012 to drop to around 7.8% (November 2012 forecast). For India, the Fund forecast predicted growth in 2012 to drop to 4.9% (November 2012 forecast).The fund expected that economic growth in Middle East and North Africa (MENA) countries in 2012 would drop to 5.3% (Nov 2012 forecast). In fact that these predictions came as the result of some risks, such as the increasing debts of developed economies, low growth of emerging markets and rising oil prices. However, the most important of those risks was the ever increasing pressure in the euro area which posed the greatest threat to the prospects for the global economy.