By Bernd Debusmann Jr
Unlike other countries in the region, the UAE produced more oil in 2019 than 2018, pumping at a pace of 3.1m bpd compared to 3m in 2018
The UAE’s economy is expected to expand by 2.2 percent in 2020 amid a general recovery in the Middle East, according to an economic update from the Institute of Chartered Accountants in England and Wales (ICAEW).
In the report, ICAEW noted that unlike other countries in the region, the UAE produced more oil in 2019 than 2018, pumping at a pace of 3.1m bpd compared to 3m in 2018.
“Overall, this implies a positive contribution to growth from the oil sector, which has expanded by around 2.5 percent year-on-year in 2019, unlike a drag elsewhere in the region,” the report said.
The report added that it maintains its estimate that UAE non-oil GDP growth will accelerate in 2020 to 2.8 percent, which will translate into stronger job creation.
Additionally, the report noted that real estate market conditions are unlikely to see much of a rebound in the remainder of 2019 and first half of 2020, “reflecting expected strong supply growth and still subdued demand”.
Overall, the Middle East’s wider economy is expected to recover at an estimated 2.1 percent in 2020, primarily driven by an uptick in the Saudi Arabian and Iranian economies.
“In the GCC, oil remains the dominant driver of growth. Consequently, low-trending prices and ongoing output caps pose a challenge for GCC countries that are heavily reliant on hydrocarbon receipts to balance their budgets,” the report noted.