GDP Growth Rate for the United Arab Emirates - Example

Paper 1 GDP Growth Rate for the United Arab Emirates (UAE) – 2000 to 2013 The following data pertain to the UAE’s gross domestic product (GDP) growth rate for the period 2000 to 2013. Table 1: The UAE’s annual GDP growth rate Year GDP growth (% per year) 2000 10.9 2001 1.4 2002 2.4 2003 8.8 2004 9.6 2005 4.9 2006 9.8 2007 3.2 2008 3.2 2009 -4.8 2010 1.7 2011 3.9 2012 4.4 2013 5.2 Sources: World Bank (2014); United Arab Emirates National Bureau of Statistics (2014). Figure 1: The UAE’s annual GDP growth rate Sources: World Bank (2014); United Arab Emirates National Bureau of Statistics (2014). Summary: The data presented in the table and graph above show that the UAE’s GDP growth rate has been fluctuating over the years between 2000 and 2013. This point is supported by Young’s (2014, p. 38) argument that the UAE’s economic performance over the years has been unstable, characterized by a sequence of expansions and contractions. For instance, while there was a high growth rate of 10.9 percent in 2000, the figure dropped significantly to 1.4 percent the following year. From 2002, there was some steady increase in the GDP growth rate, to a high of 9.6 percent in 2004. This was followed by a decrease to 4.9 percent in 2005 and another increase to 9.8 percent in 2006. However, the growth rate dropped again to 3.2 percent and remained constant between 2007 and 2008. Thereafter, it dipped further to -4.8 percent in 2009, which is the least value recorded between 2000 and 2013. The following year (2010), the GDP grew by 1.7 percent, and the positive growth trend continued to a level of 3.9 percent in 2011, 4.4 percent in 2012 and 5.2 percent in 2013. Overall, it can be said that there has been a slow but steady growth in the GDP since 2009 when the UAE experienced a negative GDP growth rate, to 2013 when the growth rate was 5.2 percent as shown on the graph. References United Arab Emirates National Bureau of Statistics. (2014). National Bureau of Statistics (Nbs): UAE’s economy realizes a further growth in 2013 GDP at constant prices to achieve a growth rate of 5.2% at the end 2013. Retrieved from http://www.uaestatistics.gov.ae/NewsEnglishDetails/tabid/108/Default.aspx?ItemId=310 World Bank. (2014). GDP growth (annual %). Retrieved from http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG Young, K.E. (2014).The political economy of energy, finance and security in the United Arab Emirates: Between the Majilis and the market. New York: Palgrave Macmillan. Paper 2 GDP Growth Rate for the United Arab Emirates (UAE) – 2000 to 2013 Introduction This paper presents information on the UAE’s gross domestic product (GDP) growth rate for the period 2000 to 2013. In order to help understand the significance of the trends in the GDP growth rate, the paper will also discuss a number of issues such as the meaning of GDP and growth rate. Based on this definition, the paper will discuss the trends in the growth rate of the UAE’s GDP as well as the factors that might be responsible for the trends. This will help in understanding the UAE’s economic situation and the factors that contribute to this situation. Meaning of GDP GDP refers to the financial value of all finished services and goods that are produced in a country over a specified period of time, usually one year. GDP includes all services and goods in various sectors of a country’s economy such as the service sector, manufacturing, agriculture, construction, energy, and government services among others. It also includes all of public and private consumption, government investment and outlays and exports minus imports that occur with a country’s borders over the specified period (Investopedia, 2014; BBC News, 2011). GDP is calculated as: GDP = C + I + G + NX, Where, C = total consumption, I = total investment, G = government expenditure, and NX = total net exports Source: Investopedia (2014) Meaning of GDP growth rate GDP growth rate refers to the percentage change in real GDP from one period to the next (Hall & Lieberman, 2010, p. 140). It can be calculated on a quarterly basis, which means using three-month periods (quarters) as the basis for the comparison, half yearly (using six-month periods) or annually (using one-year periods). The percentage change from one period to the next is the percentage growth (or decrease) of the GDP. GDP and the economy GDP is important to any country’s economy because it determines economic growth. Economic growth means the increase in a country’s production over a specified length of time (Barrington, 2013, p. 33). According to Barrington (2013, p. 33), the standard way of measuring the economic growth of a country involves looking at yearly changes in the country’s GDP. This means that an increase in the GDP indicates economic growth while a drop in the GDP signifies economic decline during the specified period. The economic situation of the UAE The changes in the values of GDP growth rate for the UAE from 2000 to 2013 can be used to explain the country’s economic condition. The data for this period show that the UAE’s GDP growth rate has been fluctuating over the last decade or so. This point is also discussed by Young (2014, p. 38), where he notes that the UAE’s economic performance over the years has been unsteady, featured by a sequence of expansions and contractions. For example, whereas there was a high GDP growth rate of 10.9 percent in 2000, the growth plummeted to 1.4 percent in 2001. This was followed by some growth starting 2002 at 2.4 percent, to a high of 9.6 percent in 2004. This was followed by a drop to 4.9 percent in 2005, and another increase to 9.8 percent in 2006. However, the growth rate decreased again to 3.2 percent and remained unchanged in the period 2007 to 2008. There was a further dip to -4.8 percent in 2009, which is the lowest value witnessed between 2000 and 2013. In the next year (2010), the GDP increased by 1.7 percent, and the positive growth trend continued to a level of 3.9 percent in 2011, 4.4 percent in 2012 and 5.2 percent in 2013. Overall, it can be argued that in recent times, the UAE has experienced a slow but study increase in the GDP, from 2009 when the growth rate was -4.8 percent, to 2013 where the growth has been positive at 5.2 percent. See the figure below. The reason why the UAE is economy is so volatile is the reliance on hydrocarbons (such as crude petroleum, petroleum gas and refined petroleum), whose prices are very volatile (International Monetary Fund, 2013, p. 4). Thus, when the prices of these products increase, the GDP expands; and when there is a drop in prices of the same products, the GDP contracts. However the, significant decline in the UAE’s GDP growth rate in 2009 (-4.8 percent) was caused by the Dubai debt crisis and a concomitant financial meltdown that considerably slowed the economic growth of the country (Young, 2014, p. 38). Summary The information on GDP growth rate for UAE in the period 2000 to 2013 can be summarized as follows. First, the GDP growth rate has been fluctuating over the years, with contractions and expansions. This indicates that the economic growth rate is very volatile. Secondly, it has been seen that the volatility of the growth rate is mainly due to the point that the UAE relies on products such as crude petroleum, petroleum gas and refined petroleum, whose prices are very volatile. Thirdly, there are also other factors that contribute to the contractions and expansions of the GDP, such as the Dubai debt crisis and the related recession that was experienced in 2009. References Barrington, L. (2013). Comparative politics: Structures and choices (2nd ed.). Boston, MA: Wadsworth. BBC News. (2011, April 26). Q&A: What is GDP? Retrieved from http://www.bbc.com/news/business-13200758 Hall, R.E., & Lieberman, M. (2010). Macroeconomics: principles and applications. Mason, OH. South-Western Cengage Learning. International Monetary Fund. (2013).United Arab Emirates: Selected issues. Washington, D.C.: International Monetary Fund. Investopedia. (2014). Gross domestic product – GDP. Retrieved from http://www.investopedia.com/terms/g/gdp.asp Young, K.E. (2014).The political economy of energy, finance and security in the United Arab Emirates: Between the Majilis and the market. New York: Palgrave Macmillan. Read More