UAE GDP growth could reach 4-5% a year from 2017

The United Arab Emirates is expected to see real GDP growth of between 4 and 5 per cent a year from 2017 to 2020 due to a recovery in the oil price and growing public and private sector activity, according to a new report.

Business intelligence service MEED said that project activity in the country was forecast to recover next year as preparations for Dubai Expo 2020 get underway.

This would see real GDP growth rise from the 3.1 per cent growth expected this year.

Project spending has remained flat in 2016 due to cutbacks in government spending and a review of infrastructure developments in Abu Dhabi, according to the firm.

MEED said there were $155bn of major projects under execution in the country by the middle of the year but $629bn were planned but not underway.

About $22.6bn of contracts have been awarded in the first half of the year, driven by real estate, transport and power projects in Dubai worth about $16bn.

Around $37bn of projects are expected to be awarded this year.

The UAE has been responsible for an estimated 35 per cent of projects in the GCC from 2006 to 2015, worth $507bn.

MEED said its forecasts could be affected if oil price increases fail to materialise, OPEC changes its strategy to pursue market share and output fails to increase.

Its assumptions are based on UAE oil exports with an average price of $37 in 2016 and $50 in 2017, increasing a further 10 per cent each year to 2020.