Sovereign wealth funds and other government entities in the UAE greatly increased their overseas investments during 2011 as higher oil prices led to a large rise in the country's balance of payments surplus, new figures from the UAE Central Bank indicate.
Capital outflows from UAE public sector entities rose to Dh95 billion ($26 billion) in 2011 from Dh10 billion in 2010, according to the recently-released Central Bank annual report for 2011. That was the highest outflow since 2008, when the global financial crisis led to a sharp drop in the UAE's oil revenues.
Economists said the jump in capital outflows last year likely reflected higher overseas investments by the Abu Dhabi Investment Authority, which invests the emirate's surplus oil income in overseas markets, and by other wealthy government-owned investment vehicles such as the International Petroleum Investment Co, which invests in oil and gas ventures overseas, and Mubadala Development Co., which leads the Abu Dhabi government's diversification strategy away from the oil and gas sector.
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