The UAE's non-oil gross domestic product is expected to exceed 70 per cent by 2010, according to forecasts by NCB Capital, a Saudi Arabia-based investment bank.
The country's GDP is believed to have reached Dh698 billion last year from Dh599 billion in 2006, according to the UAE Ministry of Economy.
"The UAE economy has been largely hydrocarbon-independent. Going forward, on the back of continued diversification efforts, we expect the growth in non-oil sectors to surpass that of the oil sector. We estimate the contribution of hydrocarbons to GDP to fall further to 29.7 per cent by 2010," said Bryan D'Aguiar, an analyst with NCB Capital.
Real estate and construction sectors are expected to be the new growth drivers in the UAE economy growing at a compounded annual growth rate (CAGR) of 25.4 per cent and 21.6 per cent, respectively over 2007-2010.
According to NCB Capital's estimates, the contribution of these two sectors together is expected to rise to around 23 per cent by 2010 from 16 per cent in 2006.
The UAE economy has grown at CAGR of 23 per cent over the last four years, primarily driven by the hydrocarbon sector clocking an average growth of 34 per cent during this period.
Although the hydrocarbon sector has is expected to remain resilient on the back of high oil prices, the non-hydrocarbon sector has accelerated its growth in recent years (growing at an average of 17.8 per cent) and accounting for an average 67 per cent of nominal GDP since 2003.
A key growth driver for the future is expected to be the non-oil sector owing to favourable government policies, focus on diversification, an increased role of private sector, free trade and foreign direct investment. ( Gulf )