Dubai: The UAE economy is projected to grow at 2.9 per cent in 2018 and 3.7 per cent in 2019 against and estimated growth of 0.8 per cent, according to the latest regional economic outlook report of the International Monetary Fund (IMF).
“Growth projections are based on the significant increase in oil prices and the progress the country has made in fiscal adjustments on both revenue and expenditure side. Going forward, we expect the improved government revenues to reflect on the growth in non-oil economy,” said Jihad Azour, director, Middle East and Central Asia Department of the IMF.
The IMF projects strong growth revival in both Abu Dhabi and Dubai in next two years. In 2018, Abu Dhabi’s GDP is projected to grow by 2.7 per cent and 2019 by 3.4 per cent, against 0.5 per cent growth in 2017.
Dubai’s GDP is projected to grow at 3.3 per cent in 2018 and 4 per cent in 2019 compared to a 2.8 per cent growth recorded in 2017.
“Recent oil price increase is yet to trickle down to private sector growth in the UAE and Saudi Arabia. With fiscal and structural reforms already set in motion, it is an opportune time for encouraging growth in non-oil private sector,” said Azour.
The IMF observed that higher oil prices and slower pace of fiscal consolidation are boosting near term growth pro-spects for the region’s oil exporters. GDP growth for oil exporters is projected at 1.4 per cent in 2018 and 2 per cent in 2019.
In GCC countries, following a contraction in 2017, growth is projected to recover and reach 2.4 per cent in 2018 and 3 per cent in 2019. As for the non-oil sector, growth is projected to remain steady at 2.4 per cent.
For oil-importing countries in MENA, growth is expected to continue at a modest pace of 4.5 per cent in 2018, be-fore dropping back to 4 per cent next year, the IMF said.
This level of growth is not sufficient to create the required jobs for a region marred by instability and civil strife, it said. Oil revenues for MENA exporters have increased by about $260 billion (230 billion euros) over the period 2016 to 2018.
This has mostly been due to a price rise generated by production cuts in nations belonging to the OPEC, as well as non-OPEC producers.