Growth in the United Arab Emirates’ economy will accelerate to 3.7 percent in the coming year, from 2.9 percent in 2018, as it starts to recover from the slowdown caused by the oil-price slump, according to the International Monetary Fund.
Higher oil prices and OPEC’s decision to raise output had been a boost for the oil sector, while non-oil growth is estimated to rise to 3.9 percent this year and 4.2 percent in 2020, the IMF said at the end of a country consultation.
“Inflation is expected to remain low, notwithstanding the introduction of the value-added tax earlier in 2018. Although nonperforming loans rose during the slowdown, banks remain liquid and well capitalized,” the Washington-based lender said.
In its Friday report, the IMF said increased investment, better private sector credit and a boost to tourism from Expo 2020 will add to growth momentum in the next few years.
The contribution of the private sector is projected to rise following the introduction of structural reforms including lower fees and removing restrictions on foreign ownership in some sectors, the IMF said. Reforms should focus on increasing competition, improving financial inclusion and promoting talent, it recommended.