International and United Arab Emirates Economics : Case study analysis - Essay Example

Predictions of employment situation as well as inflation can be useful for predicting the future economic situation. The growth situation of the economy of the country can be accessed in terms of the GDP of the country. We consider both real and nominal GDP. Real GDP is expected to grow at 4.9% for the period 2011-15 much closer to the target of 5.2% (Sabavala and Butter). The nominal GDP growth in the upcoming years has been analyzed in the figure below: Oil economy had to suffer for the ongoing financial crisis and the situation is expected to improve with recovery efforts of UAE.

The average has remained at US$ 80 per barrel. However oil production in the GCC countries is expected to remain unaltered whereas attempts of recovery from crisis will cause a rise in the oil prices in the upcoming years (Jones). For UAE oil forecasts has been given as US $82 per barrel. But they come down to US$71 per barrel once Brazil and other OPEC member countries increase their supply. The strength of UAE and GCC countries lies in trade and advanced infrastructure scenario. The economic growth in these areas depends a lot on governmental policies.

Adopting an expansionary fiscal policy public expenditure is likely to increase more in the upcoming years facilitating development. Owing to the recent financial crisis the monetary policies of the country will surely concentrate on maintaining stability of the banks and the overall financial system. Stricter regulations are expected to be imposed on the banking sector. The completion of pipeline project Abu Dhabi Crude Oil Pipeline will surely facilitate oil exports through the new route (Sabavala and Butter).

As regards sectoral growth analysis can be made from sectoral composition of GDP with their respective growth rates as shown in the figure below: Agriculture has grown consistently at the rate of 2 percent for the last 3 years. It is expected to grow at a slow rate in the