IMF says UAE non-oil growth looks set to quicken with fiscal stimulus and Expo
Economic activity in the UAE is recovering and is likely to gain momentum next year, according to the International Monetary Fund.
The country’s non-oil economic growth could exceed 1 per cent this year and further accelerate to around 3 per cent in 2020, its fastest pace since 2016, as businesses benefit from the various fiscal stimulus programmes and Dubai Expo 2020. The six month-long event is expected to attract more than 25 million visitors. “Sustaining robust non-oil growth after Expo 2020 remains a key priority,” said Koshy Mathai, the IMF executive who led the mission to the UAE.
Sustained growth of the nonoil economy is “more pressing over the longer term” as global oil demand is likely to slow in the face of technological advances and policy responses to climate change, he said.
The UAE’s overall gross domestic product would register a 2.5 per cent rise in 2020, the IMF said after concluding an Article IV Consultation with the UAE.
The fund based in Washington identified development and growth of the small and medium enterprise sector and strengthening fiscal frameworks as top priorities for the country, to ensure sufficient savings of oil wealth for future generations and the smoothing of short-term economic fluctuations.
The IMF mission lauded the steps taken to implement a comprehensive national SME development strategy. It recommended establishing a single agency responsible for SME promotion, and suggested steps to lower start-up costs, operationalise the new insolvency framework and promote greater financial inclusion.
“The authorities have already taken a number of important steps, including adopting a foreign direct investment law allowing 100 per cent foreign ownership in selected sectors, and reducing or eliminating fees and penalties,” the IMF said. “A further strengthening and development of the financial sector should support private-sector development while mitigating risk.”
The IMF mission lauded the steps taken to implement a comprehensive national SME development