The International Monetary Fund (IMF) on Tuesday revised the UAE's growth outlook downward, in line with a cut in global forecasts for 2019 and 2020, according to the latest World Economic Outlook report released on Tuesday.
The UAE's 2019 growth outlook was slashed from 2.8 per cent in April 2019 to 1.6 per cent. In addition, next year's growth was also cut by 0.8 per cent to 2.5 per cent. The IMF also projected a 2.5 per cent growth rate over the next five years till 2024.
Meanwhile, the UAE Central Bank, last month, revised the country's forecast upward by 0.4 per cent to 2.4 per cent for 2019, following a strong growth in the first quarter, led by the oil sector.
The IMF also slashed the growth forecast for the region's largest economy of Saudi Arabia by 1.7 per cent and 0.8 per cent for 2019 and 2020, respectively, from its previous forecast. It now projects a 0.2 per cent growth for 2019 and 2.2 per cent for 2020. Regionally, the Middle East and North Africa (Mena) growth outlook was slashed by 0.6 per cent and 0.4 per cent for 2019 and 2020, respectively, from its July 2019 forecast. The IMF now foresees a 0.1 per cent growth in 2019 and 2.7 per cent for the next year.
For Middle East oil exporters, the IMF predicts a contraction of 0.7 per cent in their economies this year and a 2.3 per cent growth in 2020.
"While non-oil growth is expected to strengthen in 2019 on higher government spending and confidence, oil GDP in Saudi Arabia is projected to decline against the backdrop of the extension of the Opec+ agreement and a generally weak global oil market," the IMF said.
The newly-formed Middle East and Central Asia regional group's growth has also been slashed by 0.5 per cent and 0.3 per cent to 0.9 per cent and 2.8 per cent, respectively, largely due to a downward revision in Iran due to tighter US sanctions.
The IMF also slashed global growth forecast by 0.2 per cent to 3.0 per cent for 2019 and 0.1 per cent to 3.4 per cent for the next year, as compared to its July forecast.
After a sharp slowdown during the last three quarters of 2018, global growth stabilised at a weak pace in the first half of 2019. "Trade tensions, which had abated earlier in the year, have risen again sharply, resulting in significant tariff increases between the US and China and hurting business sentiment and confidence globally," the IMF said.
Growth for the US was slashed by 0.2 per cent to 2.4 per cent for this year and hiked by 0.2 per cent for the next year to 1.7 per cent. The fund also slashed the growth outlook for all the major economies such as Germany, China, India, and the UK.
China's growth has been slashed by 0.1 per cent and 0.2 per cent and India's outlook was cut by 0.9 per cent and 0.2 per cent for 2019 and 2020, respectively.
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