The UAE's Booming Economy
- 25 June 2013
The International Monetary Fund (IMF) has projected a GDP growth rate of 3.6 percent for the UAE in 2013, from 3.1 percent previously estimated, highlighting the promising prospects of medium-term economic growth. This growth is expected to rise to 3.7 percent in 2014 and 3.8 percent in 2015.
This is a significant development in many ways. First of all, this is expected to be a balanced growth, which will be supported by various sectors such as infrastructure, trade, tourism, logistic services, industry and renewable energy. The report cited the positive indicators of the UAE’s overall economy.
Moreover, sectors that have played a pivotal role in boosting the engine of growth belong to the non-oil category. This demonstrates the fact that the UAE has made significant progress to implement programs aimed at diversifying national economy away from oil sector. It also indicates that the country’s economic growth will be immune from the fluctuations in international oil prices.
The projected GDP growth rate indicates that the nation’s economy has recovered from the ill-effects of the international financial crisis, which severely hit real estate business in some provinces of the UAE. This growth trajectory will draw the curtains on these contagions and usher in a new phase of risk-free economic prosperity in the UAE.
It is also expected that this growth will be fuelled by bullish investment prospects in the country’s economy over the next few years, which is expected to rise from 14.2 percent in 2012 to 18.7 percent in 2018. This is another indication of the real improvement in investment landscape in the country and suggests that the UAE will be a safe bet for local and foreign investors.
The expected rise in economic growth would be accompanied by receding inflation. According to IMF estimates, local inflation rate is expected to not exceed 2.5 percent up to 2015, with a 1.3 percent difference between growth and inflation rates. This indicates improvement of standard of living for inhabitants of the UAE.
Finally, this growth projection is an indication of the efficient macroeconomic policies pursued by the UAE, which are extremely balanced and stimulate economic growth without inviting inflationary pressure. They have succeeded in maintaining economic and financial stability and protecting growth from inflation-induced erosion.