UAE economy to grow by 2.8% this year, 4.2% in 2019 — central bank governor

The private sector was a key sector for the UAE and for future growth, UAE Central Bank Governor Mubarak Rashed Al-Mansoori said. (AFP)
Updated 06 November 2018
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UAE economy to grow by 2.8% this year, 4.2% in 2019 — central bank governor

  • Inflation is expected to stand at 3.6 percent for the year
  • The UAE has managed to diversify 77 percent of its economy in the aftermath of the fall in oil prices that began in 2014

DUBAI: The UAE economy is forecast to grow 4.2 percent in 2019, while the Emirate’s non-oil economy is expected to expand by 3.7 percent for the same year, the country’s central bank governor said on Tuesday.
“We tend to believe that Q3 GDP would be 3.1 (percent), non-oil GDP would be 3.3. We are hoping to close the year at 2.8 percent for the GDP and 3.3 percent for non-oil GDP and this is really coming from 2.5 percent in 2017,” Central Bank Governor Mubarak Rashed Al-Mansoori said during a speech at the MENA Financial Summit in Abu Dhabi, as reported by Zawya.
Last month, the International Monetary Fund said that the UAE’s economy was expected to grow by 2.9 percent this year and 3.7 percent next year.
The UAE Cabinet has announced last month a 17.3 percent increase in its federal budget spending for 2019, up to a predicted 60.3 billion dirhams ($16.4 billion), from 51.4 billion dirhams that was approved for 2018. The cabinet also announced that a forthcoming three-year federal budget would not run at a deficit.
Al-Mansoori added that inflation is expected to stand at 3.6 percent for the year.
“Due to the implementation of VAT, there is a one-time effect. So, we started in January at a high level but we have been declining ever since,” he said.
Inflation rose to 2.7 percent in January, from 1.5 percent the previous month, after a new 5 percent value-added tax was imposed on a majority of consumer products and services.
Al-Mansoori said inflation stood at 3 percent in September.
The UAE’s central bank chief also said that banks’ lending to the private sector had been “soft” at the beginning of this year, but has subsequently increased by 6.5 percent.
"In terms of our lending to the private sector, which I am sure a lot for journalists would like to see, we were soft at the beginning of the year but now we are starting really to pick up,” Al-Mansoori said.
“The private sector is really a key sector for the UAE and for future growth,” he added.
The UAE introduced a new debt law last month. The new regulation will allow the government to start issuing sovereign bonds in the local currency.
The governor said the UAE has managed to diversify 77 percent of its economy in the aftermath of the fall in oil prices that began in 2014.
He praised the country’s move to cut subsidies and implement other reforms to combat the drop in oil prices.


UAE, Jordan sign $100 million deal to fund SMEs

Updated 2 min 7 sec ago
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UAE, Jordan sign $100 million deal to fund SMEs

  • The pact will fund around 22,000 projects over five years, as well as generate around 28,000 jobs for the Jordanian youth
  • It will also implement special initiatives for women, the youth, and other disadvantaged groups

DUBAI: The United Arab Emirates signed a $100 million agreement with Jordan to boost small and medium-sized enterprises (SMEs) in Jordan.

The multimillion-dollar agreement was finalized during the official visit of Abu Dhabi Crown Prince Sheikh Mohamed bin Zayed Al Nahyan to Amman earlier this week.

The cooperation and financing pact will support entrepreneurship in Jordan, funding around 22,000 projects over five years, as well as generate around 28,000 jobs for the Jordanian youth.

“The agreement reflects the depth of relation between the two countries. It aims to strengthen cooperation with regional and international institutions that support entrepreneurship and SMEs,” according to Hussain Jasim Al Nowais, chairman of the Abu Dhabi-based Khalifa Fund for Enterprise Development.

The Khalifa Fund will implement the developments, along with Jordan’s Crown Prince Foundation.

The agreement will also implement special initiatives for women, the youth, and other disadvantaged groups – with women-focused projects accounting for 47 percent of the developments, and rural areas getting 40 percent of the fund.

“Our partnership with Khalifa Fund will support the Jordanian youth in general, and those belonging to disadvantaged areas in particular,” Fawaz Al-Zu’bi president of the Jordan Crown Prince Foundation’s board of trustees, said.

The UAE last month extended a Dh3 billion ($833 million) economic aid package to the Jordanian government to boost the kingdom’s economic growth.