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United Arab Emirates to grow 3% in 2019: World Bank

United Arab Emirates to grow 3% in 2019: World Bank

Khaleej Times, 8 January, 2019

The UAE’s gross domestic product (GDP) will maintain its strong growth in 2019 and the next two years, helped by higher investment and regulatory reforms, despite headwinds in the global economic growth, said a new report released on Tuesday.

The World Bank said in its latest report that the UAE is expected to grow two per cent in 2018 but the growth is expected to accelerate to three per cent in 2019 and 3.2 per cent in the following two years of 2020 and 2021.

The International Monetary Fund (IMF) in October hiked the UAE’s growth forecast for 2018 and 2019 on the back of higher oil prices, continued reforms to promote the private sector and increased government spending.

“With oil production and government spending set to rise, overall growth is projected to strengthen to 2.9 per cent this year and 3.7 per cent next year,” IMF had said.

According to World Bank’s January 2019 Global Economic Prospects, growth among oil exporters is expected to pick up slightly this year, as GCC countries as a group accelerate to a 2.6 per cent rate from 2 per cent in 2018. “Higher investment and regulatory reforms are anticipated to support stronger growth in the GCC. Iran is forecast to contract by 3.6 per cent in 2019 as sanctions bite,” World Bank said.

In rest of the GCC, Kuwait is projected to clock fastest GDP growth of 3.6 per cent this year followed by Oman (3.4 per cent), Qatar (2.7 per cent), Bahrain (2.6 per cent) and Saudi Arabia (2.1 per cent).

For the Mena region, the World Bank estimated 1.7 per cent growth for 2018 and 1.9 per cent in 2019 as growth among oil exporters is estimated to have strengthened last year.

“Among the countries of the GCC, increased oil production and prices have eased fiscal consolidation pressures, enabling higher public spending and supporting higher current account balances. Among non-GCC oil exporters, anemic growth in Iran associated with US sanctions has been a drag on regional growth,” it said.

Global economic growth is projected to soften from a downwardly revised 3 per cent in 2018 to 2.9 per cent in 2019 amid rising downside risks to the outlook, the World Bank said on Tuesday.

“International trade and manufacturing activity have softened, trade tensions remain elevated, and some large emerging markets have experienced substantial financial market pressures,” the January 2019 Global Economic Prospects said.

Growth among advanced economies is forecast to drop to two per cent this year.

“At the beginning of 2018 the global economy was firing on all cylinders, but it lost speed during the year and the ride could get even bumpier in the year ahead”, said World Bank CEO Kristalina Georgieva.

“As economic and financial headwinds intensify for emerging and developing countries, the world’s progress in reducing extreme poverty could be jeopardised. To keep the momentum, countries need to invest in people, foster inclusive growth, and build resilient societies,” Georgieva said.