DUBAI: International Monetary Fund (IMF) has revised the UAE’s growth outlook for this year and the next to 3.2 percent.
UAE’s non-oil GDP is now forecast to grow at 4.4 percent this year and the IMF said it is likely to move up to 4.5 percent in 2016, it said in its latest regional outlook report.
“The non-oil economy is projected to expand by over 4 percent per annum in the coming years on the back of Dubai’s strong core services sectors and Abu Dhabi’s diversification efforts,” it said.
The IMF lowered inflation forecast for 2015 to 2.1 percent from 2.3 percent in the previous year. It, however, revised upward inflation again for the next year to 2.3 percent.
Between July 2014 and April 2015, oil prices dropped by 50 percent. They are now expected to be $58 per barrel in 2015 before rising gradually to $74 per barrel by 2020, in response to a decline in oil investment and production and a pickup in oil demand as the global recovery strengthens.
World Bank said earlier in its Mena Economic Indicator report that the UAE’s real GDP growth is forecast to slow from 4.7 percent in 2014 to 3.1 percent this year due to a decline in oil prices.
The IMF said the UAE’s GDP grew 3.6 percent while non-oil GDP registered a growth of 5.2 percent in 2014.
Across the GCC countries, GDP growth is forecast at 3.4 percent in 2015, revised downward since last October by 1 percentage point, mainly because of a slowdown in non-oil growth in response to lower oil prices.
In terms of the UAE’s nominal GDP, IMF sees it dropping by Dh139 billion to $363.7 billion (Dh1.334 trillion) this year from $401.6 billion (Dh1.473 trillion) in the previous year. It’s expected to increase to $392.1 billion (Dh1.439 trillion) next year.
It predicted current account balance dropping from 12.1 percent of GDP in 2014 to 5.3 percent this year but rising to 7.2 percent in 2016.
In the Gulf region, inflation is expected to decline by half a percentage point to just above 2 percent because of strengthening currencies – which are pegged to the US dollar – and declining food prices. Lower oil prices are unlikely to affect inflation significantly, because most countries use administered prices for fuel products.
In Saudi Arabia, the growth forecast for 2015 is now 3 percent, down 1.5 percentage points from last October, although half of this revision owes to the rebasing of real GDP data.
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