Arabian Business, 13 March, 2019
KPMG is anticipating “double-digit” growth in the United Arab Emirates (UAE) and Oman over the next few years, with the consultancy firm’s regional CEO highlighting positive factors in the local economy as a whole, despite more traditional sectors like retail and real estate proving to be more challenging.
“The IMF has recently revised GDP growth estimates to 3.7 percent. Then there are the stimulus packages [in Dubai and Abu Dhabi] and that foreign direct investment into the country increased by $4.8 billion in 2018. Now many people would continue to point at retail and real estate, but these too cannot be ignored,” said Nader Haffar, CEO of KPMG Lower Gulf, which consists of the UAE and Oman.
KPMG, one of the ‘Big Four’ global accountancy and auditing firms, is anticipating “double-digit growth over the next three to four years,” according to Haffar. “Counting South Asia, our annual revenue growth is averaging 17.2 percent [in the Middle East and Asia],” he added.
A depressed retail and real estate market, hallmarks of Dubai and the UAE’s economy for nearly two decades, are the result of “a maturity cycle,” said Haffar.
“You cannot continue doing what you have been for 20 years and expect the same kind of growth in the future again. But those are sectors that are more challenged than the others,” he said.
The “sentiment of negativity” around the market in the UAE was a result of what happened in 2015, when oil prices fell, and after which value-added tax (VAT) was introduced to supplement state revenues. However, “any impact [of introducing VAT] has been absorbed,” he said.
“No one would begrudge another a moment of doubt. I remember we were all very worried and confused about how it would affect margins and inflation. But there isn’t cause for negativity anymore. The amount of revenue VAT will generate will be reinvested in infrastructure, which will in turn attract more people here, then more investors. The move will actually pay off quite a bit,” he said.
Haffar compared the current economic climate to 2001, when, in the wake of the bursting of the dotcom bubble, he said he too “did not believe in the economy.”
“Today, everyone’s had the conversations where they say, ‘Ah I wish I’d put my money in this or that in 2001 or even 2003,’” he said.