x Abu Dhabi, UAEWednesday 24 January 2018

IMF praise for UAE on debt progress

The IMF has welcomed progress in scaling back debt but cautions more needs to be done.

The International Monetary Fund has warned of risks related to US$30 billion (Dh110.19bn) of debt, owed by large companies linked to the Government, falling due this year.

The IMF welcomed progress in scaling back debt but cautioned more needed to be done.

Companies part-owned by the Government had high "indebtedness, refinancing needs and reliance on foreign funding", the fund said yesterday.

It advised such companies to be more open to investors and urged controls to stop banks taking on more debt.

Dubai World agreed to a deal in 2010 to restructure $25bn of debt and several other large businesses have since made similar progress despite rocky conditions.

The IMF also cautioned about government spending after rises in federal public sector pay and a host of infrastructure projects were approved in Abu Dhabi in January.

But it said the economy was on the right track even as the global outlook remained challenging.

"The recovery of the economy is continuing despite the uncertain global economic environment," the IMF said.

High oil prices, increased crude output, strong growth in Asia and the country's isolation from regional unrest helped the economy to grow 4.9 per cent last year.

The statement follows the IMF's annual mission to the country last month.