UAE’s GDP to grow more than 6% in 2022, says IMF

The UAE’s overall GDP is projected to grow over 6 per cent in 2022, after increasing by 3.8 per cent in 2021, propelled by a rebound in tourism, construction and activity related to Expo 2020 Dubai, the International Monetary Fund (IMF) has said.

“Inflation has risen with global trends and is expected to average just over 5 per cent this year,” Ali Al-Eyd said, who led an IMF team that held discussions with the UAE authorities for the 2022 Article IV Consultation from November 2-17.

“Fiscal and external surpluses have increased further, benefiting from the higher oil prices as well as the removal of the temporary Covid-crisis related fiscal support to businesses and households as the pandemic has gradually waned. Increased global uncertainty led to larger financial inflows, contributing to rapid real estate price growth in some segments,” the IMF added.

The UAE’s non-oil foreign trade amounted to Dhs1.053tn in the first half of the year, growing 17 per cent compared to the same period last year. The country’s non-oil exports were close to Dhs180bn, growing 8 per cent compared to the same period in 2021, while its tourism revenues surpassed $5bn during H1 2022.

Read: UAE’s non-oil trade rises 17% to exceed Dhs1tn in H1 2022

“Looking ahead, the UAE economic outlook remains positive, supported by domestic activity. We expect non-hydrocarbon growth to be around 4 per cent in 2023 and to accelerate over the medium-term with the implementation of ongoing reforms,” the fund added.

“Inflationary pressures are projected to moderate gradually, including from the impact of tightening financial conditions. Further development of domestic capital markets, including through the issuance of local currency debt by the federal government will also support growth.”

Al-Eyd added that the outlook is subject to significant external uncertainties, including the impacts of global economic and financial headwinds, geopolitical developments, and the recently announced OPEC+ production cuts.

Oil prices plunged following a report that OPEC+ was considering an output hike, then recovered to end little changed after Saudi Arabia pushed back against the suggestion. West Texas Intermediate held near $80 a barrel in early Asian trading after swinging in a $5 arc in the week’s opening session.

With inputs from Bloomberg