UAE RESILIENT WITH 2.9% GROWTH

2019 GDP mainly driven by oil sector performance

The UAE economy grew by 2.9 per cent in 2019 compared to 1.7 per cent in the previous year, mainly driven by growth in the oil sector, the UAE Central Bank said in its fourth-quarter report.

“The overall real GDP is estimated to have grown by 2.9 per cent in 2019, driven by the growth in the non-hydrocarbon sector, estimated at 1.1 per cent, and by the hydrocarbon sector whose growth is estimated at 7.6 per cent in 2019. The hydrocarbon sector exhibited significant growth, due mainly to the two-digit growth in condensates and natural gas production,” it said in the report.

The figures are also higher from its previous estimate of 2.3 per cent growth, which was predicted in the third quarter. The central bank’s growth rate for 2019 is also substantially higher than the International Monetary Fund’s forecast of 1.6 per cent announced in October 2019.

The IMF had revised the UAE’s growth outlook downward from 2.8 per cent in April 2019 to 1.6 per cent in October. For 2020, it had cut this by 0.8 per cent to 2.5 per cent. The fund projected a 2.5 per cent growth rate until 2024.

The central bank said economic sentiment improved in the fourth quarter of 2019, benefiting from an increase in government spending and a rise in oil prices, as well as robust performances in the labour and credit markets.

The UAE’s other key indicators also fared well as credit growth accelerated by 6.2 per cent year on year in the threemonth period, with bank deposits increasing by 6.5 per cent.

The UAE economy grew 1.3 per cent in the fourth quarter, slightly lower compared to the previous period, on the back of a slower hydrocarbon growth. However, non-hydrocarbon GDP growth accelerated in the fourth quarter.

For 2020, Monica Malik, chief economist at Abu Dhabi Commercial Bank, predicted a stronger forecast for non-oil activity in the UAE, helped by Expo 2020 Dubai.

“The initial support related to Expo will be through investment with the infrastructure being finalised for the event, followed by the boost to consumption activity — a rise in short-term employment and higher tourism. We are also seeing traction building in Abu Dhabi’s investment programme, alongside the UAE having the most expansionary fiscal stance in the region in 2020,” she said.

Remittances dip

Meanwhile, the central bank said remittances from the UAE fell 2.5 per cent in 2019 to Dh164.9 billion, compared to Dh169.2 billion in the previous year.

In the fourth quarter, remittances from the UAE totalled Dh40.6 billion versus Dh39.9 billion in the same quarter of 2018.