UAE economy to grow by 2.8% this year, 4.2% in 2019 — central bank governor

Tue, 2018-11-06 11:37

DUBAI: The UAE economy is forecast to grow 4.2 percent in 2019,
while the Emirate’s non-oil economy is expected to expand by 3.7
percent for the same year, the country’s central bank governor
said on Tuesday.
“We tend to believe that Q3 GDP would be 3.1 (percent), non-oil
GDP would be 3.3. We are hoping to close the year at 2.8 percent
for the GDP and 3.3 percent for non-oil GDP and this is really
coming from 2.5 percent in 2017,” Central Bank Governor Mubarak
Rashed Al-Mansoori said during a speech at the MENA Financial
Summit in Abu Dhabi, as reported by Zawya.
Last month, the International Monetary Fund said that the UAE’s
economy was expected to grow by 2.9 percent this year and 3.7
percent next year.
The UAE Cabinet has announced last month a 17.3 percent increase in
its federal budget spending for 2019, up to a predicted 60.3
billion dirhams ($16.4 billion), from 51.4 billion dirhams that was
approved for 2018. The cabinet also announced that a forthcoming
three-year federal budget would not run at a deficit.
Al-Mansoori added that inflation is expected to stand at 3.6
percent for the year.
“Due to the implementation of VAT, there is a one-time effect.
So, we started in January at a high level but we have been
declining ever since,” he said.
Inflation rose to 2.7 percent in January, from 1.5 percent the
previous month, after a new 5 percent value-added tax was imposed
on a majority of consumer products and services.
Al-Mansoori said inflation stood at 3 percent in September.
The UAE’s central bank chief also said that banks’ lending to
the private sector had been “soft” at the beginning of this
year, but has subsequently increased by 6.5 percent.
“In terms of our lending to the private sector, which I am sure a
lot for journalists would like to see, we were soft at the
beginning of the year but now we are starting really to pick up,”
Al-Mansoori said.
“The private sector is really a key sector for the UAE and for
future growth,” he added.
The UAE introduced a new debt law last month. The new regulation
will allow the government to start issuing sovereign bonds in the
local currency.
The governor said the UAE has managed to diversify 77 percent of
its economy in the aftermath of the fall in oil prices that began
in 2014.
He praised the country’s move to cut subsidies and implement
other reforms to combat the drop in oil prices.

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Source: FS – All-News-Economy
UAE economy to grow by 2.8% this year, 4.2% in 2019 — central bank governor