National Bank of Kuwait (NBK) said that the UAE’s economic outlook remains stable, despite a slowing global economy, trade disputes as well as softer energy demand and heightened geopolitical tensions.
Dr. Saade Cham, NBK Group Chief Economist, said, “The medium-term outlook for the UAE remains stable underpinned by sizable sovereign wealth funds’ assets and the federal government’s commitment forging ahead with reforms.
The UAE’s non-oil economy is expected to grow modestly by one per cent in 2019, trending up to around two per cent during 2020-21 as the impact of structural reforms, fiscal stimulus and the effects of EXPO 2020 come into play.
NBK stated that growth prospects in the medium-term remain solid however further efforts towards diversification and continued progress in fiscal, private sector and regulatory reform will be required to weather the possibility of continued adverse external shocks.
The UAE’s overall growth stood at 3.7 per cent year on year in Q1 2019, supported by the oil sector, while the non-oil economy slowed to 0.3 per cent year on year.
In a report, NBK said that headwinds from the uncertain global and regional geopolitical situation have had an adverse impact on UAE economic growth.
Trade ties between the UAE and other GCC countries have consequently increased, with GCC countries’ share of UAE non-oil exports rising from 23.2 per cent in 2017 to 34.1 per cent in 2018, due to a difficult external environment.
Saudi Arabia tops the list of regional trading partners, attracting 16 per cent of the UAE’s non-oil exports, said NBK.