IMF's country chief has said the implementation of VAT was "relatively smooth"
Dubai’s economy is expected to grow 4.2 percent in 2019 due to government infrastructure spending ahead of Expo 2020 Dubai, according to Natalia Tamirisa, the International Monetary Fund’s mission chief for the UAE.
In an interview with Bloomberg, Tamirisa noted that the emirate’s economy is expected to grow 3.4 percent.
Dubai’s economy grew 2.8 percent in 2017. Abu Dhabi’s non-oil GDP rose 1.8 percent in 2018, compared to an anticipated 2.5 percent this year and 3.3 percent in 2019.
Additionally, Reuters quoted Tamirisa as saying that the UAE’s implementation of 5 percent value-added tax has been “well managed and relatively smooth.”
According to the latest figures, annual consumer price inflation rose to 4.8 in January – the highest since 2015 – but fell back to 3.4 percent in March.
Tamirisa said that the figures suggest that the impact of the tax would be short-lived, largely due to the fact that inflation had fallen in some areas of the economy not covered by the tax.
In her remarks, she noted that inflation is expected to average 3.5 percent this year, up from 2.0 percent in 2017, but will stabilise at approximately 2.5 percent.
In the long term, Tamirisa said that VAT is expected to raise revenues by 1.5 percent of GDP.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.