Abu Dhabi: The UAE's gross domestic product will increase by 8.5 per cent in 2007 to Dh697 billion from Dh642 billion in 2006, according to a forecast by the Ministry of Finance and Industry.

The ministry's 2006 Investment Environment Report said the country's gross domestic product (GDP) grew 35 per cent in current prices and 10.7 per cent in real terms compared with 8.5 per cent in 2005.

The current account surplus rose to Dh130.4 billion, or 20.3 per cent of GDP, from Dh70.2 billion, or 14.7 per cent, in 2005, it said.

The report cited remarkable growth in the country's trade surplus, which reached Dh206.1 billion from Dh139.6 billion.

Trade boom

The value of trade between the UAE and the rest of the world totalled Dh937.3 billion, or 146 per cent of the GDP, increasing by Dh203.9 billion, or 27.8 per cent, compared with Dh733.4 billion.

Commodities exports (oil and non-oil) grew from Dh436.5 billion to Dh571.7 billion during the period, while imports increased to Dh365.6 billion from Dh296.9 billion.

During the same period, foreign direct investment grew substantially, with Europe accounting for 35 per cent, followed by Gulf with 26 per cent, Asia-Pacific with 19 per cent, other Arab countries with 3 per cent, the Americas with 2 per cent, and Africa with 1 per cent. The remaining 14 per cent came other countries.

Investment

Processing industries and water and electricity sector captured 29.5 per cent of foreign direct investment, followed by wholesale and retail sector with 21.7 per cent.

The report said tourism revenues grew from Dh32.4 billion in 2005 to Dh39.8 billion last year, while the number of hotels increased from 290 to 306 .

Total number of tourists visiting UAE also increased to 6.44 million from 6.16 million.

The report also highlighted the legal framework aimed at attracting foreign investments, including the Cabinet's decision number 8/299 for 2006 assigning the Ministry of Economy to draft a federal law on foreign investments.