By Staff writer
Country is urged by the International Monetary Fund to use large financial reserves to balance the budget
The International Monetary Fund (IMF) has called for the UAE to ease up on spending cutback, it has been reported.
Instead, the country should use large financial reserves to balance the budget to help nudge growth higher in 2016, reported The National.
"In view of the ample policy space provided by the UAE’s large buffers, the pace of consolidation should be eased in 2016 to minimise its impact on growth at a time when sentiment is weak on account of the drop in oil prices," said the report.
Cost-reducing initiatives such as a reduction in energy subsidies and public spending cuts have been put in place in the UAE since oil prices began to fall.
The IMF predicts growth of 2.3 percent in the UAE in 2016, down from 2015’s 4 percent growth. It is forecasting that the UAE’s cumulative fiscal deficit will reach US$18.4 billion from 2016 to 2021 as low oil prices reduce government income, though its net international investment position is estimated at 181 percent of GDP at the end of 2015, due to sovereign wealth funds, the IMF said.
On Wednesday, the IMF said the UAE's property loans were improving despite price declines.
countries dont seem to ever get the IMF and World Bank to be happy. if they have deficits, they 'advise' them to increase tax, remove subsidies and cut public spending.
if the countries start to do it, then they start to 'advise' to avoid that and use your reserves or sell important public institutions.
one minute austerity. next minute print more (quantitative easing)