Mubasher: The UAE is still experiencing a slowdown in economic growth, with a less pronounced cycle than in 2008, according to a report by Bank of America (BofA) Merrill Lynch Global Research.
BofA Merrill Lynch expected overall UAE real GDP growth to reach 0.9% in 2017, while non-oil real GDP growth is likely to have bottomed out as the fiscal drag eases and infrastructure activity picks up.
The oil sector is likely to see contraction due to the deal of the Organization of Petroleum Exporting Countries (OPEC), but we see non-hydrocarbon real GDP growth picking up to 2.7% in 2017, the report stated.
It also highlighted that non-oil growth is expected to increase to 3%-3.5% over the medium-term on the back of greater Expo 2020 projects.
Dubai’s fiscal balance is likely to shift to modest deficits (1%-2% GDP) from 2017, while the Dubai 2017 budget projects a deficit of $0.6 billion (0.6% of GDP).
The Abu Dhabi government could record a fiscal surplus this year at oil prices around $50 per barrel (pb).
The 2017 Abu Dhabi budget is likely to see a surplus of AED 15 billion ($4.1 billion) on revenue projections of AED 285 billion (up 10% versus 2016 outturn) and spending targets of AED 270 billion (down 6.2% versus 2016 outturn).
