Abu Dhabi economy showing signs of recovery, says official

Abu Dhabi’s economy, the largest in the United Arab Emirates (UAE), is showing signs of recovery on the back of heavy government spending, an Abu Dhabi official said yesterday.“The government is spending heavily on projects.These are signs of economic recovery,” Khalifa al-Mansouri, undersecretary of the Department of Economic Development in Abu Dhabi, told reporters, adding that spending was focused on tourism and infrastructure.Mansouri predicted the emirate’s gross domestic product would grow 3% this year and 4% in 2018, after growth of roughly 3% last year.Average growth in the last five years was 4.1%, he said.The forecast appears more optimistic than that of the International Monetary Fund, which has forecast the UAE will see GDP growth slowing to 1.3% this year because of a shrinking oil sector in Abu Dhabi, as the UAE cuts oil output in line with a supply agreement among global producers.Meanwhile Aldar Properties won a contract on Monday to build a new site for the twofour54 free trade zone that hosts media firms. Aldar, the state-linked construction firm that built Abu Dhabi’s Formula One circuit, was awarded the build-operate-transfer contract for the new site by the government-owned Media Zone Authority-Abu Dhabi, twofour54 said.The United Arab Emirates has built free trade zones across the country, offering foreign firms 100% ownership and repatriation of profits.Outside these zones, firms in the UAE usually need to be at least 51% owned by UAE nationals. The twofour54 free zone for media firms, now based in Abu Dhabi city, will move to nearby Yas Island where the Formula One circuit is located.Companies that are already set up in the free zone include CNN and Sky News Arabia.The first phase of building the free trade zone is valued at 1bn dirhams ($272mn), the statement said. The initial gross floor area would be 95,000 square metres and would expand over time to 300,000 square metres, it said.Dubai, another of the seven emirates making up the UAE, has developed specialised free trade zones for various industries, ranging from media to health.