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DUBAI / Emirates Business
The UAE GDP is expected to accelerate to 2.6% growth in 2018 and to around 3.8% in 2019.
The growth will be primarily driven by recovering oil prices, an expansionary fiscal stance at the federal and emirate levels, a buoyant trade and tourism environment and a pick-up in investment ahead of Expo 2020 in Dubai, according to ICAEW’s latest report.
The non-oil sector proved to be resilient last year despite the regional economic slowdown, growing by 3%. The non-oil sector is expected to grow 3.7% in 2018, supported by improving business sentiments, a buoyant trade and tourism environment and higher public spending. Since the UAE is a highly open economy with trade value accounting for more than twice the country’s GDP, any growth in regional and global economic activity will contribute positively to the country’s economic output this year.
The outlook for the UAE’s tourism industry is highly positive. Dubai airport passenger traffic was up 5.5% year over year (y/y) in 2017 and hotel occupancy averaged over 86% in the first two months. The trend is likely to continue in 2018.
More positively, the UAE federal government is expected to increase spending by 5.6% y/y. According to the report, GCC’s economic prospects are promising this year thanks to rising
oil prices, higher government spending and steady progress of economic reform.