The oil sector contracted 3 per cent due to lower output, according to preliminary estimates by the Federal Authority for Competitiveness and Statistics
UAE economy records 0.8% growth last year on non-oil sector expansion
The UAE economy, the second largest in the Arab World, grew 0.8 per cent year-on-year in 2017 thanks to expansion in the non-oil sector, government figures showed on Tuesday.
The oil sector contracted 3 per cent due to lower output, according to preliminary estimates by the Federal Authority for Competitiveness and Statistics. As an Opec member, the UAE is complying with global oil output curbs that were implemented in January last year and are in place until the end of this year. The crude production pact has helped lift oil prices, which touched a three-year high of $80 a barrel last month.
The Central Bank of the UAE raised its economic growth forecast for 2018 to 2.7 per cent from its previous projection of 2.5 per cent in anticipation of expansion in the non-oil sector despite a slower year-on-year growth in the first quarter.
Non-oil GDP growth is forecast to rise to 3.9 per cent this year compared with 3.4 per cent last year, according to central bank data.
Higher government spending and a rise in oil prices are expected to help propel growth this year. Dubai has announced a slew of measures aimed at boosting growth, attracting foreign direct investment and reducing the cost of doing business in the emirate.
Growth in the first three months of this year reached 1.21 per cent, slower than 3.01 per cent recorded in a year-earlier period, but higher than 0.06 per cent expansion in the fourth quarter of 2017.
Non-oil GDP in the first quarter of 2018 was driven by higher global growth, improvement in private credit growth and the depreciation of dirham on the back of weak dollar to which the currency is pegged, which boosted the country’s competitiveness.