UAE – Mubasher: The UAE’s economy continued to adjust during the full-year 2018, but signs of growth are now emerging, with domestic credit growth, employment, and tourist arrivals showing improvement, according to the International Monetary Fund’s (IMF) recent report.
“The economy continued to adjust last year. Corporate consolidation and structural reforms, including in large government-related entities (GREs) and commercial banks, as well as the fiscal position, weighed on aggregate demand. Given the dollar peg, the dirham appreciated against currencies of major trading partners and interest rates rose in general,” the report said.
The GCC nation’s non-oil growth declined to 1.3% for the year ended 31 December 2018, while the overall economy increased to 1.7% over the same period, encouraged by the hike of oil production.
“Some green shoots are now emerging, with domestic credit growth, employment, and tourist arrivals showing improvement recently, though the real estate sector continues to face an overhang of supply,” the Washington-based fund said.
The IMF noted that the UAE’s economy may now be at a turning point, supported by public spending, a substantial amount of Expo 2020 investment should be completed by the end of 2019.
However, growth could exceed 2% over the course of 2019 and approach 3% in fiscal year 2020/2021.
It is worth mentioning that government spending and some sectors are still affected by oil price fluctuations.
