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Emirates Business
The economic outlook for UAE is set to accelerate to 2 percent this year, up from the eight-year low of 0.8 percent in 2017, supported by rising oil prices, regional economic recovery, higher public spending and investment and a build-up in business momentum, according to ICAEW’s latest Economic Insight report.
The accountancy and finance body says the non-oil sector, which represents close to as much as 70 percent of the UAE’s economy, is driving the country’s economic growth this year.
The Economic Insight: Middle East Q4 2018, produced by Oxford Economics, says the non-oil activity, as evident by the Central Bank’s non-oil augmented economic composite indicator, has accelerated by 3.8 percent year-on-year in Q1 2018, marking the fastest expansion in eight quarters. The non-oil sector is expected to grow by 3 percent in 2018 and by 3.6 percent in 2019.
Other proxy indicators also paint a similarly positive picture. The PMI index has remained in expansionary terr- itory this year, while credit to the private sector continu-
ed to trend upwards over the last few months, reaching a 19-month high in August at 5.4 percent.
The non-oil sector will be stimulated as the UAE government recently announced reforms to support the economy. Dubbed Ghadan 21 (or Tomorrow 21), they entail an AED50 billion ($13.6 billion) stimulus plan that includes various measures to prop up investment and facilitate doing business in the country. Economic reforms will also be complimented by the recent approval of the largest federal budget in the country’s history, of AED60 billion ($16.3 billion), with more than half allocated to education and social development.