By Sarah Townsend
BMI analysis predicts UAE economy to pick up in 2017, but Abu Dhabi to lag behind Dubai
The UAE’s economic growth is forecast to quicken in 2017 in line with rising oil prices and enhanced commercial confidence.
However, Abu Dhabi’s growth is likely to lag behind that of less oil-dependent Dubai, new research suggests.
Real GDP growth for the UAE is expected to come in at 2.8 percent and 3.3 percent respectively, following the weak 2.2 percent estimated in 2016, according to a paper by BMI Research.
Higher oil prices are set to enable greater government spending and bolster business confidence, the report says, adding that the non-oil sector will be the primary driver of gains given an extension of the OPEC agreement to curb production.
This means Dubai’s economic expansion will outpace that of the more oil-reliant Abu Dhabi, the report says.
In both emirates, government spending is expected to rise following the austerity measures of last year, in construction especially.
A separate analysis from Egyptian investment bank EFG Hermes contradicts BMI’s research, forecasting that the UAE economy will pick up in 2018, but continue to slow this year.
The bank said growth is expected to slip to 1.1 percent this year from 3 percent in 2016, but accelerate to 3 percent in 2018.