Growth in the United Arab Emirates’ economy will accelerate to 3.7 percent in the coming year, from 2.9 percent in 2018, as it starts to recover from the slowdown caused by the oil-price slump, the International Monetary Fund (IMF) said.

Higher oil prices and Opec’s decision to raise output had been a boost for the oil sector, while non-oil growth is estimated to rise to 3.9 per cent this year and 4.2 per cent in 2020, the IMF said at the end of a country consultation.

“Inflation is expected to remain low, notwithstanding the introduction of the value-added tax earlier in 2018. Although non-performing loans rose during the slowdown, banks remain liquid and well capitalized,” the Washington-based lender said.

The IMF report comes as Gulf Arab nations move slowly on implementing structural and fiscal reforms. Government spending has remained a mainstay of the region’s economy, which for decades has relied on oil, and the climb in crude prices has made it easy for GCC leaders to fall back on an old habit.

In its Friday report, the IMF said increased investment, better private sector credit and a boost to tourism from Expo 2020 will add to growth momentum in the next few years. Possible threats to the nation include global financial market volatility and trade disruptions such as the shift towards protectionism.

The contribution of the private sector is projected to rise following the introduction of structural reforms, including lower fees and removing restrictions on foreign ownership in some sectors, the IMF said. Reforms should focus on increasing competition, improving financial inclusion and promoting talent, it recommended.

“Given Dubai’s large public-sector debt, staff encouraged the authorities to be prudent when implementing recent revenue-reducing measures while containing current expenditure growth and executing the planned investment efficiently,” the IMF said in the report.