DUBAI: The economy of the United Arab Emirates will grow at a lower rate this year due to the continuation of lower oil prices, a top official in the International Monetary Fund (IMF) said in Dubai on Tuesday, estimating oil prices to average $53 per barrel in the coming two-to-three years. The economies of the six Gulf Cooperation Council (GCC) countries that include Saudi Arabia and the UAE, the Middle East’s two biggest economies, have been badly impacted by the steep decline in oil prices which began in 2014. The prices of the important commodity almost halved between June and December 2014, but have been on a slow recovery path since the start of last year.“For the UAE in general, growth in 2017 is expected to be at 1.3 percent and next year 3.4 and… last year it was 3.0,” Jihad Azour, the IMF’s director for the Middle East and Central Asia told reporters at a press conference in Dubai on Tuesday. He said the UAE’s slowdown in growth this year was mainly due to the country’s decision to cut oil exports as part of an agreement late last year by members of the Organisation of the Petroleum Exporting Countries (OPEC) and other, major oil-producing states. The OPEC states include Saudi Arabia, Qatar and the UAE.
Abu Dhabi’s economy is expected to grow by only 0.3 percent this year, down from a growth rate of 2.8 percent in 2016, according to Azour, which is mainly due to the fact that its oil-based GDP is predicted to contract by 2.7 percent this year. However, he said the emirate’s economy is forecasted to grow by 3.2 percent in 2018. “The non-oil sector in Abu Dhabi and Dubai is almost growing at the same speed, around 3 percent. Abu Dhabi, because of the size of the oil sector and the oil sector because of the OPEC-led agreement to reduce production and exports, went down this year. But it will recover next year,” Azour said. The UAE’s Energy Minister Suhail al-Mazroui said on Monday that the UAE is committed to maintaining the existing oil production cuts, according to Reuters. The cuts were first agreed in November 2016, but have been extended to March next year. Azour said the IMF predicts that oil prices will remain largely unchanged in the coming two-to-three years. “Our projections are showing that the oil price in the medium term in the next two-to-three years will remain around the same level of 50, 55, 60 dollars (per barrel), this is the range with an average that will stay around $53 (per barrel).”
