High crude oil prices and a surge of activity in construction and other sectors in 2008 will raise the economy of the uae for at least 7% real, but the expected increase in inflation – said in the statement of financial establishment of Arab League, recently published. Real gdp grew by 7.4% in 2007, this year we expect about the same increase – according to a quarterly report of the Arab Monetary Fund (Arab Monetary Fund – AMF), located in Abu Dhabi. Recently Munear Ashton Kouzbari sought to clarify these questions. "There are indicators that predict continued record growth this year, since the figure is almost equal to the 7.4% that were achieved in 2007" – the report says. "Such success will be determined by high oil prices and good growth in sectors such as construction, real estate in the uae, trade and inflows of foreign investment. " The report did not give figures for gdp, but based on current prices, the Ministry of uae economy estimated it at about 729.3 billion dirhams, ae (AED) in 2007 compared to aed 624.6 billion in 2006, that is, nominal growth was 16.8%. The economy was marked by high real and nominal growth over the past few years thanks to a surge in oil prices, massive public and private investment, a sharp increase in construction and strong growth in most other sectors, such as selling real estate in the uae.
High growth has allowed the country to maintain its position as the second Arab state in terms of the economy after Saudi Arabia, as well as stay on the same, second, place after Qatar's per capita income, which last year exceeded 170,000 aed. Large-scale public and private investment have been named among the key causes of rising inflation in the uae and other Gulf countries that produce oil, and the burst of rental prices and food prices, as well as the weakening national currency against the U.S. dollar. Compared with less than 3% in 2000, in 2005, inflation exceeded 6%, up almost 9.3% in 2006 and 11.1% in 2007, "High economic growth in the uae is accompanied by growth in consumer prices ", – said the Arab Monetary Fund. "Official figures show that inflation remained within the 11.1% last year and this year it is expected that the figure would remain high". In the report reference was made to counter-measures uae government to combat inflation, but it was noted that the lowering of central bank interest rates to bring them into conformity with the United States Federal Reserve, led to higher liquidity. The report cited official figures showing that private loans have achieved in the first quarter of this year, aed 5 billion, while money supply grew by 8.4% by the end of the first quarter, compared with their levels at the end of 2007 marks the 40% growth compared to the first quarter of 2007, "Since it is expected that the level of investment will remain stable, cash reserves may reach $ 1 trillion aed by the end of 2008," – said aps. By Central Bank of uae money supply peaked at aed 754.5 billion at the end of March, although at the end of December was approximately 696.2 billion aed.