The UAE's real GDP growth is projected to grow faster next year at 2.5 per cent on the back of stronger growth of the non-oil sector, according to International Monetary Fund's (IMF) latest report.
The IMF had earlier revised down growth forecast for 2019 to 1.6 per cent from its previous forecast of 2.8 per cent.
Jihad Azour, director for Middle East and Central Asia Department at IMF, said the UAE's nominal GDP is expected to slip from $414.2 billion in 2018 to $405.8 billion this year. But it will recover again next year to $414 billion in 2020 on the back of non-oil sector growth.
Importantly, the non-oil sector will continue to grow, rising from 1.3 per cent last year to 1.6 per cent in 2019 and 3.0 per cent the year after. But the oil GDP growth is forecast to slow down from 2.8 per cent in 2018 to 1.5 per cent this year. And it will further decline to 1.4 per cent next year when Expo-led non-oil sector will give fillip to the non-oil sectors such as tourism, aviation, hospitality among other sectors.
IMF predicts that the UAE's oil output will continue to increase from 3.02 million barrels per day last year to 3.10m bpd in 2019 and 3.17m bpd the year after.
He called on the regional governments to diversify their revenues through tax and non-tax sources.
For GCC, the GDP grew 2.0 per cent in 2018 but it slowed down to 0.7 per cent in 2019. It is a cut 1.4 per cent from its April 2019 forecast. For 2020, GCC is projected to grow 2.5 per cent, a cut of 0.3 per cent from its April 2019 forecast.
By Waheed Abbas
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