UAE’s non-oil real GDP growth to Pick up to 1.9% in 2019 and 2.2% in 2020: IIF

The non-hydrocarbon real GDP growth of the United Arab Emirates (UAE) is expected to pick up to 1.9 percent in 2019 and 2.2 percent in 2020, supported by Abu Dhabi’s three-year stimulus package and Dubai’s spending linked to Expo 2020, the Institute of International Finance (IIF) noted in its report on Sunday.

Growth could ease to less than 2 percent beyond 2020 as the impact of Abu Dhabi stimulus and Expo 2020 fades, adding that to achieve higher nonhydrocarbon growth over the medium term, deeper reforms are needed to raise total factor productivity growth to 1.5 percentage points.

The IIF report added that following two decades of relying on construction and services to drive rapid growth, the UAE needs a new growth model in the face of prolonged low oil prices and an overvalued exchange rate.

“The main downside risks to the outlook include lower oil prices and slower global growth, which weighs on transport, logistics, tourism, and foreign investment,” IIF report maintained.