UAE economy set for 3.8% annual surge until 2023
Outlook for Emirates' growth brighter compared to the rest of GCC
Driven by an uptick in investment flows and private consumption, the UAE economy is forecast to record an average annual real GDP growth of 3.8 per cent between 2019 and 2023, the Dubai Chamber of Commerce and Industry said.
Real GDP for the UAE's non-oil sector is projected to grow by an average of 4.1 per cent between 2019 and 2023, compared to the 2.8 per cent accounted for in the 2014-18 period, a study revealed.
The Dubai Chamber's growth projection for the UAE is in line with forecasts made by the International Monetary Fund, which expects the Arab world's second-biggest economy to 3.7 per cent next in 2019, following 2.9 per cent expansion in 2018.
UAE Minister of Economy Sultan bin Saeed Al Mansouri predicted that the country's GDP would grow more than 3 per cent in 2019 after recording between 2.5 per cent and 3 per cent growth in 2018.
The outlook for the UAE economy is brighter than for the rest of the GCC, according to an IMF report that estimates that the six-nation bloc's GDP is expected to increase by 1.9 per cent in 2018 and 2.6 per cent in 2019, overcoming a dip of 0.2 per cent in 2017.
According to analysts, the UAE and Kuwait are set to post fiscal surpluses in 2018 due to the recovery in oil prices, while Saudi Arabia is expected to register a modest deficit as Bahrain and Oman are likely to continue to report mid- to single-digit deficits, keeping their balance sheets under pressure.
"The momentum behind the UAE's GDP growth over the next five years will likely be led by the country's transport and communication sector which is set to record GDP growth of 7.9 per cent, followed by construction [4.2 per cent], and real estate and business services [3.8 per cent]," the Dubai Chamber study said.
In addition, recent measures to reduce cost of doing business in the UAE are expected to support activity within the country's SME and private sectors in the near future.
The findings of the analysis, based on the Dubai Chamber UAE Macroeconomic Model, were revealed during a business seminar recently hosted by the Dubai Chamber, which examined growth projections for the UAE and global economies, Dubai's top export markets, and the most attractive export opportunities for Dubai traders.
The analysis identified other key factors that are expected to drive economic activity in the UAE, including expansionary fiscal policy and a growing number of infrastructure and construction investments in the run-up to Expo 2020. The chamber report said a recovery in private consumption and sales of highly cyclical consumer products is expected, extending to products such as vehicles, furniture, household appliances, and medical equipment. The Dubai Chamber also projected robust growth in investment on the back of government fiscal stimulus.
For Dubai, the Middle East and North Africa accounts for the largest share of exports (41 per cent), followed by Emerging Asia with 26 per cent, Sub-Sahara Africa (18 per cent), the CIS (1 per cent) and Latin America (0.8 per cent), trade data for the first nine months of 2018 revealed.
Source: Khaleej Times