UAE economy to grow 3% in 2019, IMF says

IMF projects slower growth outlook for GCC countries in 2018

The UAE economy is expected to grow at 3 per cent next year, according to the latest World Economic Outlook (WEO) of the International Monetary Fund (IMF).

For 2018, meanwhile, the UAE’s growth has been projected at a more modest 2 per cent, compared to the projections of 3.4 per cent made in last October.

The country’s economic growth has been revised downwards to 0.5 per cent in 2017 from a projected 1.3 per cent in October last year.

GCC countries overall are projected to grow at slower pace in 2018 than the earlier projections according to the IMF estimates.

Relative to the forecasts in the October WEO, with the pickup in oil prices, prospects for oil exporters have improved somewhat with a small downward revision to 2018 growth and a positive revision to 2019 growth.

In Saudi Arabia, growth is projected to resume this year, rising to 1.7 per cent from a contraction of 0.7 per cent in 2017.

Growth in 2019 is expected to rise slightly to 1.9 per cent as oil output increases, with the assumed expiration of the Organisation of the Petroleum Exporting Countries (Opec) production cut agreement.

For Saudi Arabia, the forecast has been revised up from the October WEO by 0.6 and 0.3 percentage points for 2018 and 2019, respectively.

The latest IMF numbers for 2017 show Saudi Arabia and Kuwait had negative growth of minus 0.7 per cent and minus 2.5 per cent respectively, while Qatar had a 2 per cent real GDP growth.

Qatar’s economy is projected to grow at 2.6 per cent and 2.7 per cent in 2018 and 2019, respectively. Kuwait is projected to recover from recession and report a positive growth of 1.3 per cent in 2017 followed by 3.8 per cent growth in 2019.

The IMF projects that global growth will strengthen from 3.8 per cent in 2017 to 3.9 per cent in 2018 and 2019, driven by a projected pick-up in growth in emerging markets and developing economies and resilient growth in advanced economies.

The forecast for 2018 and 2019 is stronger than in the October 2017 WEO by 0.2 percentage points for each year, with positive revisions for emerging market and developing economies and for advanced economies.

The global effects of US fiscal policy changes account for almost half of the global growth upgrade for 2018-19 compared with October.

Global growth is projected to strengthen to 3.9 per cent in 2018 and 2019, up from 3.8 per cent in 2017, driven by a projected pick-up in emerging market and developing economies, as well as resilient growth in advanced economies, according to the Word Economic Outlook (WEO) published by the International Monetary Fund (IMF).

The forecast for 2018 and 2019 is stronger than that given in the October 2017 World Economic Outlook by 0.2 percentage points for each year, with positive revisions compared to the October 2017 World Economic Outlook for emerging market and developing economies and especially for advanced economies.

The global effects of US fiscal policy changes account for almost half of the global growth upgrade for 2018–19 compared with October. Beyond 2019, global growth is projected to gradually decline to 3.7 per cent by the end of the forecast horizon. Advanced economies are projected to grow at 2.5 per cent in 2018 — 0.2 percentage points higher than in 2017 — and 2.2 per cent in 2019.

For both years, this forecast is considerably stronger than the October WEO forecast (0.5 and 0.4 percentage point higher for 2018 and 2019, respectively). Positive revisions are broad-based, reflecting stronger prospects for the Eurozone and Japan, and especially the projected domestic and spillover effects of expansionary fiscal policy in the United States.

In the US, growth is expected to rise from 2.3 per cent in 2017 to 2.9 per cent in 2018, before moderating slightly to 2.7 per cent in 2019, 0.6 and 0.8 percentage point stronger than projected for 2018 and 2019, respectively, in the October WEO. The recovery in the Eurozone is projected to pick up slightly to 2.4 per cent this year, up from 2.3 per cent in 2017, before moderating to 2 per cent in 2019.

Emerging markets

Growth in emerging market and developing economies is expected to increase further — from 4.8 per cent in 2017 to 4.9 per cent in 2018 and then to 5.1 per cent in 2019. Emerging Asia, which is forecast to continue growing at a rate of about 6.5 per cent during 2018–19, remains the most important engine of global growth.

In China, growth is projected to soften slightly to 6.6 per cent in 2018, down from 6.9 per cent in 2017, before easing further in 2019 to 6.4 per cent. Growth in India is projected to increase from 6.7 per cent in 2017 to 7.4 per cent in 2018 and 7.8 per cent in 2019, lifted by strong private consumption as well as fading transitory effects of the currency exchange initiative and implementation of the national goods and services tax.