IMF says UAE non-oil growth looks set to quicken with fis­cal stim­u­lus and Expo

The National - News - - BUSINESS - Sar­mad Khan

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

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