Economic activity in the UAE is set to accelerate to 2.2% in 2019, up from an estimated 1.7% in 2018, according to ICAEW’s latest Economic Insight report. This will be buoyed by a pick-up in non-oil activity, rising public spending at the Federal and Emirate levels, higher investment ahead of the highly anticipated Expo 2020 and continued regional economic recovery.
Economic Insight: Middle East Q1 2019, produced by ICAEW and Oxford Economics, says oil production in the UAE picked up in 2018 to mitigate for tightening global oil markets, notably after the US imposed sanctions on Iranian oil exports. The oil sector is forecast to grow by around 2.5% in 2019, marking the fastest growth rate for the
sector in three years.
The UAE’s non-oil sector is expected to accelerate from an estimated 1.3% in 2018 to 2.1% in 2019. Growth in the non-oil sector will be supported by expansionary budgets and various pro-growth government initiatives, notably in Abu Dhabi and Dubai, which collectively account for an estimated 90% of the UAE’s GDP. The Dubai government has also announced a number of initiatives to support growth, including lowering certain taxes and fees and measures to reduce the overall costs of doing business for key industries.