10.43 AM Friday, 29 March 2024
  • City Fajr Shuruq Duhr Asr Magrib Isha
  • Dubai 04:56 06:10 12:26 15:53 18:37 19:52
29 March 2024

IMF sees UAE economy growing over 4% in medium-term

Pickup in private investment in the run-up to the Dubai Expo 2020 will boost economic activity in the UAE.

Published
By Staff

The growth of UAE’s non-oil sector is expected to increase above four per cent in the medium term, thanks to recovery in oil price, pickup in private investment in the run-up to the Expo 2020 and a host of other factors, International Monetary Fund said in a note on Wednesday.

“Economic activity is expected to moderate further in 2016, before improving over the medium term. Over the medium-term, nonhydrocarbon growth is forecast to increase to above four per cent as the dampening effect of fiscal consolidation is offset by improvements in economic sentiment and financial conditions as oil prices rise, a pickup in private investment in the run-up to the Expo 2020, and stronger external demand,” IMF Executive Board said in an assessment note of the country’s economy.

Executive Directors welcomed the UAE’s resilience to the oil price shock.

Directors commended the authorities for their prudent policies, which helped build large fiscal and external buffers and strengthened the economy.

Nevertheless, persistent lower oil prices continue to pose challenges. Directors underscored the need for sustained sound macroeconomic policies to reduce fiscal vulnerabilities, safeguard financial stability, and promote long-term growth.

IMF directors welcomed the authorities’ commitment to pursue fiscal consolidation. For the near-term, in light of the ample buffers, they generally considered a gradual adjustment effort to be appropriate in order to minimise the negative impact on growth. However, stronger fiscal consolidation will be needed over the medium term to ensure intergenerational equity.