1. Ajman Macro-economic overview 2012 Presented to the IMF Northern Emirates Experts’ Meeting Ajman Department of Economic Development 1

2. Content : 1. Introduction 2. GDP Growth 3. Investment Growth 4. Employment Growth 5. Productivity Growth 6. Foreign trade Growth 2

3. Introduction: This presentation overviews Ajman macro economic structure and growth experience. The presentation is constrained by the availability of data 3

4. Over the last decade GDP average annual growth was (12.7%): Fast growing sectors: YEARS 20012002200320042005200620072008200920102011 GDP45934829586569618494109591263314441138821451215165 GDP at current market prices (million Dhs) 2001 - 2011: SectorsAverage annual GDP growth 2001-2011 Finance20 % Construction18 % Manufacturin g 15 % Sectors Average GDP growth 2001-2011 Trade13 % Tourism12.6 % Real estate12 % 4

5. Economic Sectors Average annual GDP growth % 2001- 2008 Finance25.6% Construction24% Manufacturing20.6% Trade16.8% Tourism15.9% Real estate15% Overall annual average17.8% Pre-crisis GDP growth 2001-2008: GDP grew from (4,595) mDhs in 2001 to (14,441) mDhs in 2008 Source: calculation based on NBS data 5

6. Economic contraction In 2009 Ajman economy contracted, as a result of the crisis, GDP grew by (-3.9%) compared to its 2008 rate of (14.1%), dropping from (14.441) mDhs in 2008 to (13,883) mDhs in 2009. Contraction was accounted for by three sectors: sectorsAnnual GDP growth 2009 manufacturing(-9% ) construction(-8.9%) real estate(-0.6%) 6

7. Economic Recovery: GDP increased from (13,882) mDhs in 2009 to (15165) mDhs in 2011: Economic SectorsAnnual GDP growth % 2011 Construction7.9% Real estate6% Transport, storage & communication 5.6% Manufacturing3.6% Finance3% Trade1.9% Tourism1.6% Overall average annual GDP growth 4.5% 7

8. Economic SectorsPercentage contribution to GDP 2001 Percentage contribution to GDP 2011 Agriculture0.5 %1.5 % Manufacturing32 %35.5 % Electricity gas & water2.9 %2.5 % Construction10.5 %14.7 % Whole sale retail trade & repairing services 13.2 %12.8 % Restaurants & hotels2.4 %2.2 % Transport, storage & communication9.1 %5.7 % Real estate & business services12.7 %11.3 % The financial corporation sector2.6 %4.3 % GDP Structure: With the exception of manufacturing, construction and finance, all sectors witnessed a decline in relative importance in 2011: 8

9. GDP per capita increased at annual rate of (4.7 %) during the period 2005 – 2010. GDP per capita Years GDP per capita Dirham’s Growth rate 200541,034 200651,69326% 200756,3979% 200860,9328% 200955,540-8.9% 201054762-1.4% 201154160-1.1 % GDP per capita 2005 – 2010: 9

10. Investment growth: Gross fixed capital formation grew at an average annual rate of (11.9%) over the period 2001 – 2010: Gross Fixed Capital Formation (mDhs) 2001-2010 : YEARS 2001200220032004200520062007200820092010 GFCF 1231124913751475152118102286334532113391 10

11. Sectrol Investment growth 2001 – 2010: Sectoral investment growth ranged between 5-27 % during the period 2001-2010: sectors Investment growth% 2001-2010 Government services sector27 % Restaurants & hotels (Tourism)19.7% Electricity,gas & water16.4% Wholesale retail trade& repairing services16% Agriculture14.9% Construction9.5% Real-estate & business services8.2% Manufacturing7% The financial corporation sector6.5% Transport,storage & communication5% Average annual rate of growth11.9% 11

12. Distribution of investment by economic sectors2001-2010:- concentration in four sectors, real estate, government services,manufacturing and electricity &water in 2010 Sectors As percent of total investment % 2001 As percent of total investment 2010 Agriculture0.5%0.6% Manufacturing18.9%12.4% Electricity,gas & water9.7%13.9% Construction3.9%3.2% Wholesale retail trade& repairing services 3.4%4.8% Restaurants & hotels (Tourism)1.5%2.7% Transport,storage & communication5.6%3.2% Real-estate & business services47.6%35.2% The financial corporation sector0.4%0.3% Government Services sector5.4 %16.6 % 12

13. Impact of crisis on investment growth: Sectors Pre- crisis investment growth 2001-2008 Post crisis investment growth 2008-2010 Agriculture18.8%0% Manufacturing8.2%2.8% Electricity,gas & water19.2%7% construction8%15.3 % Wholesale retail trade& repairing services 19.7% 4.6% Restaurants & hotels (Tourism)25%2.9% Transport,storage & communication4.7%6% Real-estate & business services8.3%8% The financial corporation sector8.9%0% Government services sector44.7 %- 19.7% Average annual rate of growth15.4%0.7% 13

14. Employment Growth: Economic growth was accompanied by an expansion in employment which grew at an average annual rate of (8.9%) from (6,766) in 1975 to (111,766) in 2008. The distribution of employment by economic sectors showed concentration in the manufacturing (28%) construction (16%) and trade sectors (16%) which account for (60%) of total employment during the period 2006-2008: 14

15. Distribution of employment by sectors 2006-2008:- Economic sectors Average Relative share ( %) of total employment 2006-2008 Agriculture, livestock & fishing3.2% Quarrying0.4% Manufacturing27.8% construction16.2% Wholesale retail trade& repairing services16.2% Restaurants & hotels (Tourism)3.6% Transport,storage & communication5.5% Real-estate & business services3.5% The financial corporation sector0.4% Other sectors24% 15

16. Sectoral Employment growth 2006-2008: employment grew at an average annual rate of (3.9%) from (103554) in 2006 to (111766) in 2008: Economic sectors Average annual rate of employment growth 2008 Agriculture, livestock & fishing-6% Quarrying10.2% Manufacturing2.6% Electricity,gas & water7% construction2.4% Wholesale retail trade& repairing services5.2% Restaurants & hotels (Tourism)5.8% Transport,storage & communication5.9% Real-estate & business services5.9% Social and personal service5.8% Financial corporation sector14.9% Government services6% Domestic service of household5.3% Overall average annual growth3.9% 16

17. Overall unemployment rate in the Emirate of Ajman dropped from (6.5%) in 2008 to (4.5%) in 2009. Nationals’ unemployment declined from (13.7%) in 2008 to (7.3%) in 2009. 17

18. Productivity growth Labour productivity increased from (105,829)Dhs in 2006 to (129,207) in 2008 at an annual rate of growth of (10.5%) Average labour Productivity 2006-2008: Economic sectors Productivity level 2008 (Dirhams) Average productivity growth% 2006-2008 Agriculture, livestock & fishing63,70612.9% Manufacturing178,2767% Construction122,31220% Wholesale retail trade& repairing services96,42614.5% Restaurants & hotels (Tourism)74,9457.3% Transport,storage & communication119,35210.5% Real-estate & business services382,3896% The financial corporation sector1,191,4469.9% Average labour productivity129.20710.5% 18

19. Foreign trade (million Dhs) 2006-2010:- Trade grew annually by (8.9 %) Imports grew by more than exports & re-exports. Decline of exports relative share and increase in that of imports. Declive in trade surplus. 2006 Relative importance % 2010 Relative importance % Average annual growth% 2006-2010 Imports1,27126%3,08945%25% Exports1,97340%1,52923%-6% Re exports1,22025%1,81027%10.4% Imports for export 4169%3665%-3% Total trade value 4,8806,7958.9% Trade Balance 1,921250-40% 19