Abu Dhabi: The UAE’s short and medium-term growth prospects are positive, and external downside risks, while still substantial, have declined, according to International Monetary Fund (IMF).
In its latest assessment of the UAE economy, the IMF said it expects the country’s non-oil economy to expand by over 4 per cent per annum in the coming years on the back of Dubai’s strong core services sectors and Abu Dhabi’s diversification efforts.
IMF said a broadening recovery in construction and real estate, and ongoing growth in tourism-oriented sectors are expected to underpin a further acceleration in non-oil growth to 4.3 percent this year. “Non-hydrocarbon growth is expected to remain strong at above 4 percent in the medium term, though subject to substantial external risks. Inflation remained subdued at 0.7 per cent in 2012, and is expected to pick up only moderately in 2013.”
However, it cautioned that the still-uncertain global economic and financial environment could pose external risks to this favourable outlook, although the “UAE’s sizeable foreign assets and improving fiscal position provide significant buffers.”
Giyas Gokkent, chief economist at the National Bank of Abu Dhabi (NBAD), the emirate’s largest bank by assets and market capitalisation told Gulf News oil and natural gas remains a key sector for the UAE economy. The sector, he said, accounted for 46 per cent of the 4.4 per cent growth registered by the country’s economy in 2012.
“I expect the UAE economy to grow at 4 per cent per annum in the medium to long term,” Giyas Gokkent, chief economist at the National Bank of Abu Dhabi (NBAD), told Gulf News.
“We recently revised up our average oil price estimate for 2013 to $105 per barrel, from $102, previously. We maintain forecasts of $101 per barrel in 2014 and $100 per barrel in 2015,” he added.
Revenue generated from oil exports is the single biggest contributor to the UAE economy. The country’s crude oil exports, on average, are more than 2.65 million barrels per day.
The UAE economy is expected to sustain an annual growth rate of above 4 per cent in 2013, the Minister of Economy Sultan Bin Saeed Al Mansouri said in March.
The US-based Institute for International Finance (IIF) previously forecast that the UAE economy will cross the Dh1.5 trillion mark in 2014. It said at $360 billion in 2012, the gross domestic product (GDP) of the UAE ranks third in the Middle East North Africa (Mena) region after Saudi Arabia and Iran, and 30th in the world, which was driven largely by high global prices of crude oil, the mainstay of the country’s exports.
