Dubai will resist the economic slowdown afflicting its Gulf neighbors thanks to investments in Expo 2020, according to the International Monetary Fund (IMF).
Government spending in Dubai will drive a “rapid acceleration” to more than 5 percent GDP growth by 2020, said Zeine Zeidane, advisor in the Middle East and Central Asia Department at IMF.
As Abu Dhabi, the richest of the UAE’s seven emirates, has slashed spending in response to the oil-price drop, the IMF expects the capital’s economic growth to slow to 1.5 percent in 2016 from 4.3 percent in the previous year.
The IMF expects the UAE’s economy as a whole to expand 2.3 percent this year, and Dubai’s inflation to decline to 3.2 percent this year from 4.1 percent in 2015.
Dubai’s “diversified economy” is helping overcome the negative impact of lower oil prices felt by other regional exporters, Zeidane said.
Private sector credit growth is expected to moderate due to the slowing economy and larger fiscal financing needs.
The Dubai authorities’ vision is to further diversify the economy away from oil, which requires stepping up structural reforms aimed at further developing the private sector, transitioning towards a knowledge-driven economy, and promoting export sectors.
Zeidane said improvements could be made to various areas of the local business environment, such as the development of adequate public-private partnerships frameworks and the relaxing of restrictions to foreign ownership.
He also highlighted the need to ease access to finance for startups and small and medium enterprises (SMEs), and creating the right incentives for entrepreneurship and job creation, notably for women.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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