UAE economy to expand 3.5% this year buoyed by government measures, central bank says
Non-oil GDP is projected to rise to 3.4 per cent this year, from 2.6 per cent in 2018
The UAE’s gross domestic product is forecast to grow 3.5 per cent this year, up from 2.8 per cent in 2018, as government measures fuel economic growth, the Central Bank said.
Non-oil GDP is projected to grow 3.4 per cent this year, up from 2.6 per cent in 2018, while oil GDP is forecast to expand 3.7 per cent, up from 3 per cent in 2018, the Central Bank of the UAE said in its latest quarterly report.
The economy grew 4.4 per cent in the last quarter of 2018, the fastest-growing quarter of last year, thanks to a rise in crude oil production before the implementation of Opec cuts, which started in January. Overall growth in 2018 was 2.8 per cent, up from 0.8 per cent in 2017. The Abu Dhabi Government rolled out a Dh50 billion stimulus package last year, and in conjunction with the Dubai Government, reduced business costs in free zones and provided various forms of support to small and medium-sized businesses.
“These measures are expected to start influencing positively the UAE's growth prospects in 2019 as projections show that economic activity will improve in the non-oil sector due to the effects of the announced fiscal stimulus packages underpinned by the stronger fundamentals of the economy and improved market sentiments,” the Central Bank said.
The slew of reforms and measures aimed at boosting growth include lowering the cost of doing business, waiving corporate fines in Dubai and Abu Dhabi, granting long-term visas to some people and allowing foreign ownership of companies in selected sectors outside free zones.
The country's growth projection for this year is almost in line with that of the International Monetary Fund, which forecasts 3.7 per cent expansion during 2019-20.
“The announced fiscal stimulus packages will help lift economic growth, increase consumption, revive the property market, and improve labour markets as the investors and consumers’ sentiment continues to solidify,” the Central Bank said.
The exchequer projects the UAE’s oil production will reach 3.1 million barrels per day in 2019, down from an average of 3.285 million bpd in the fourth quarter as the country complies with Opec cuts.
As a member of Opec, the UAE is complying with a deal struck with the Opec+ alliance, which includes a Russia-led group of non-member countries, to trim output by 1.2 million bpd from January for a six-month period.
The UAE met, if not "exceeded", its compliance with the Opec+ production cuts for February, as it continued to make voluntary output adjustments, Energy Minister Suhail Al Mazrouei tweeted on Sunday. The measures are intended to rebalance the market and keep the price of oil at the $60 range after a three-year slump.
Updated: March 11, 2019 12:57 PM