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The UAE economy is in good health and will continue to pick up momentum heading into next year, helped by Expo 2020 and UAE government policies, according to the International Monetary Fund.

A report issued on Wednesday following a visit to the country predicted non-oil growth would exceed 1 per cent in 2019, and rise to 3 per cent in 2020 – the fastest since 2016. It said the UAE GDP would grow by 2.5 per cent in 2020.

The report concluded that the economy was “likely to pick up more momentum next year, helped by Expo 2020 and existing fiscal stimulus.”

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The IMF team led by Koshy Mathai was in the UAE from October 22 until Tuesday.

Mathai’s statement following the visit outlined non-oil growth as the ‘key priority’ for the UAE.

To do this, the UAE needed to continue to promote sector growth, including for small and medium enterprises (SMEs), plus strengthen “fiscal frameworks to ensure both sufficient saving of oil wealth for future generations and smoothing of short-term fluctuations.”

Mathai lauded the UAE for already taking “a number of important steps”, including allowing 100 per cent foreign ownership in certain sectors, and reducing fees and penalties.

“The mission welcomes the authorities’ steps to implement a comprehensive national SME development strategy,” Mathai said.

The report highlighted key areas for progress in the UAE economy, including lowering startup costs, operationalising the new insolvency framework; and promoting greater financial inclusion.

“The mission recommends establishing a single agency responsible for SME promotion, with any possible costs to the budget recorded transparently,” Mathai said.

On fiscal policy, the IMF called for the UAE to increase savings to preserve wealth for future generations, although noting the need for balance between short and long-term objectives.

“Developing transparent, rules-based fiscal frameworks can help ensure a balancing of objectives, and the mission welcomes the steps taken to enhance monetary and fiscal coordination,” Mathai said.

Mathai added: “The IMF team would like to express its appreciation to the authorities and other stakeholders for their hospitality and thoughtful discussions.”