The United Arab Emirates’ GDP increased by 0.8% in 2017, down from 3.0% in 2016. Over the course of 2018, the Central Bank of the UAE’s Overall Augmented Economic Composite Indicator, has shown that GDP growth has strengthened throughout the year on the back on higher oil prices, higher levels of production in the hydrocarbon sector and a strengthening non-oil sector. This indicator estimates that the year-on-year GDP percentage change to Q3 2018 stands at 3.1%, with the overall 2018 annual growth rate expected to register at 2.8% and 4.2% in 2019(Figure 1).
Outlook for the UAE‘s GDP growth in 2018 and 2019 remains positive on the back of higher oil prices, a range of stimulus packages and easing of business regulations in both Abu Dhabi and Dubai, which are likely to support activity in both the public and private sectors. Recent forecasts from the IMF indicate global economic growth is likely to continue its steady expansion with growthforecast at 3.7% in both 2018 and 2019, down only marginally by 0.2% from the previous forecasts. Despite this slight downgrade in global growth forecasts, the IMF has revised up the UAE’s GDP growth forecasts for both 2018 and 2019 from 2.0% to 2.9% and 3.0% to 3.7% respectively. The latter estimate is materially lower than the aforementioned estimates by Central Bank of the UAE.