The UAE economy continued to witness strong economic progress despite the challenging regional and global economic conditions in 2016. The country is making continuous efforts to reduce oil dependence and in the context of low oil prices and a global slowdown. We continue to see the UAE as the best placed of the GCC economies in terms of its ability to withstand sustained lower oil prices.
The manufacturing, construction, retail, real estate, storage, transportation, telecommunications, and tourism industries, among others, recorded substantial GDP contributions, demonstrating the country’s steady and balanced steps towards a post-oil era coupled with well-informed policies and programs to guarantee sustainable development.
The UAE’s GDP tripled in the past 10 years, climbing from almost Dh511 billion in 2006 to Dh1.58 trillion in 2015. The figure is expected to reach Dh1.8 trillion by the end of 2016. The growth rate at constant prices reached 3.8 per cent last year compared to 3.1 per cent in 2014.
Economists and analysts expect higher oil revenues with the expected average oil price increase to $55 per barrel next year from $44 this year should boost the growth prospects to the country in 2017.
The UAE GDP growth is expected to accelerate to 3.4 per cent next year from an estimated 3 per cent in 2016.
The financial control and the current rationalization of government spending policies adopted following the record decline in oil prices compared to mid-2014 did not prevent the government from implementing counter cyclical policies and tapping the state’s cumulative cash reserves.
Strong government spending targeted at economic diversification and major infrastructure projects including those targeted in preparation for World Expo 2020, as well as the expansion of airports, the Etihad rail network, air and marine transport systems and road networks in the country are expected to boost the growth outlook.
In 2015, government spending reached Dh179 billion, up 3.8 per cent from 2014 and by 4.5 to 6 per cent compared to levels before the emergence of significant oil price fluctuations. The country’s economic diversification plan has contributed to the non-oil sector’s growth and boosted sustainable development in the medium and long term.