Abu Dhabi’s economy to grow by 2.5% until 2022

Bloomberg

Abu Dhabi’s economic growth will average 2.5 percent in the four years through 2022 as it benefits from higher oil production and prices, S&P Global Ratings estimated.
Abu Dhabi’s economy derives 50 percent of its real gross domestic product (GDP) and more than 90 percent of the central government revenue from the hydrocarbon sector, the ratings company said in a report. Oil will continue to dominate the economy, it said.
S&P Global projects economic growth in the capital city of the UAE to accelerate to as much as 2 percent this year from 1.8 percent in 2018. It expects the growth to accelerate to 2.5 percent in 2020 and 2021 before climbing to as much as 3 percent in 2022. The S&P expects Brent will average $60 per barrel this year and next, before dropping to average $55 a barrel in 2021.
Brent has climbed 20 percent this year to $64.49 a barrel. The Abu Dhabi oil economy is set to grow 2.7 percent, according to the UAE central bank. The non-oil economy will expand an estimated 1.8 percent, the bank said. The ratings company also affirmed its AA credit rating for Abu Dhabi, with a stable outlook underpinned by the emirate’s large fiscal buffers. It projects the Abu Dhabi Investment Authority’s (ADIA) assets will average above 250 percent of the GDP over 2019-2022. ADIA is one of the emirate’s sovereign wealth funds.
S&P predicted Abu Dhabi may not raise debt in 2019, instead opting to finance its fiscal deficit of 4 percent of GDP and Eurobond repayment from liquid assets. It doesn’t expect the Abu Dhabi government will issue domestic bonds over the next couple of years, instead will wait until the UAE federal government does.
The ratings company sees Abu Dhabi general government debt levels remaining largely stable at less than 7 percent of GDP through the year 2022.