The United Arab Emirates economy grew 7.4 per cent in 2007 on the expansion of the manufacturing and construction sectors, as well as oil and gas, the Gulf state's ministry of economy said on Sunday.

Non-oil sectors accounted for 65 per cent of the gross domestic product (GDP) of the second-largest Arab economy last year, the ministry said in a report, without giving a breakdown of GDP growth by sector.

Real GDP growth last year came in just below the 7.8 per cent growth forecast by twelve economists in a Reuters poll in December. The economy should expand by another 7.8 per cent this year, the poll showed.

The UAE, the world's fifth-largest oil exporter, has been striving to diversify its economy away from a dependence on energy exports by pouring windfall oil revenues into real estate, financial services and infrastructure.

The share of manufacturing sector output to economic growth rose to 13 per cent in 2007 from 12.2 per cent a year earlier, while the building and construction sector's share climbed to 8 per cent from 7.5 per cent, the ministry said.

'Activity in the real estate sector is considered as one of the prominent trends contributing to the country's economic development,' the ministry said.

The rise in contribution of non-oil sectors to GDP 'reflect(s) the success achieved in the country's economic diversification plan,' it added.

Crude oil production accounted for 35 per cent of the GDP, down from 37.3 per cent in 2006, the ministry said. Oil prices have risen five-fold since 2002, crossing $106 a barrel last week.

The Organisation of Petroleum Exporting Countries (Opec) agreed to a rise in output last year, a 500,000 barrel-per-day increase that went into effect on November 1. The group cut output by 1.7 million barrels per day in November 2006 and February 2007.

The UAE economy expanded to Dh698 billion ($190.1 billion) in nominal terms, up 16.5 per cent from the year earlier, the ministry said in January.-Reuters