The emirates economy grew a staggering 30 per cent in 2008 as gross domestic product (GDP) reached Dh520 billion, a government report showed on Wednesday.

Record oil prices boosted the emirates oil and natural gas sector by 37 per cent, leading to a contribution of 64 per cent to GDP.

They accounted for 93 per cent of government revenues, according to the annual report published by the Department of Economic Development (DED).

"The big story in Abu Dhabi and [the] UAE is oil," said HC Securities Chief Economist Tudor Allin-Khan.

"[The government] will continue to diversify the economy but at the end of the day, [the] UAE produces oil. That wealth can then be used to diversify the economy and develop infrastructure for tourism and trade for the long term."

According to the report, the government looks likely to achieve a balance between expenditures and oil revenues at about $30 (Dh110.19) per barrel this year, meaning it will likely accumulate a large surplus.

Crude oil has averaged nearly $60 per barrel in the first nine months of the year and is projected to average $72 in 2010, according to United States Department of Energy figures.

In 2008, services sectors including financial services, restaurants and hotels, healthcare and education contributed 19 per cent to the economy, a decline of 2 per cent from the previous year. In actual value, though, the sectors grew by 17 per cent in 2008 and by 88 per cent since 2003 to Dh101 billion.

The report, which provides comparative figures beginning in 2003, shows oil and gas then accounted for just 47 per cent to the economy. It explains the increase was due to the rise in oil prices over the five years.

"Regardless of what oils contribution is now to the economy, its wise to prepare for a future where the economy is much more diversified," said Giyas G?kkent, chief economist at the National Bank of Abu Dhabis Asset Management Group.

According to the announced 2030 economic plan, the government is seeking to lower the contribution of oil to GDP to 36 per cent over the next two decades by encouraging investment in the services, manufacturing and real estate sectors.

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