The Washington-based IMF has highlighted a rebound in construction activity as one of the key factors supporting the UAE's robust economic growth of 6 per cent.
“Economic growth has been robust this year, led by a strong rebound in tourism, construction and activity related to the Dubai World Expo, as well as higher oil production in line with the Opec+ production agreements,” said the IMF’s Ali al-Eyd following the fund’s Article IV consultation with the UAE.
“Overall, GDP growth is projected to reach above 6 per cent in 2022, improving from 3.8 per cent in 2021.”
The IMF’s comments on construction reflect a growing sense of optimism for the sector, with a resurgent property market and government spending creating a wide range of project opportunities for contractors.
The outlook contrasts with the period of austerity that followed the 2014 collapse in oil prices when real estate prices steadily declined for years and the public sector reined in capital spending.
READ MORE: UAE sidesteps the global economic crunch
Economic growth in the UAE exceeded inflation, which the IMF said is expected to average just over 5 per cent this year. This is expected to cool next year. “Inflationary pressures are projected to moderate gradually, including from the impact of tightening financial conditions,” said Al-Eyd.
The IMF expects non-hydrocarbon growth of 4 per cent in 2023. “Looking ahead, the UAE economic outlook remains positive, supported by domestic activity,” said Al-Eyd.
While global economic uncertainty remains a concern, the fund added that the UAE is well-placed to deal with these challenges.
“The outlook is subject to significant external uncertainties, including the impacts of global economic and financial headwinds, geopolitical developments and the recently announced Opec+ production cuts. However, higher oil prices and healthy fiscal buffers help mitigate risks, while enhancing reform efforts would pose upside risks to medium-term growth,” said Al-Eyd.
READ MORE: Dubai construction sows seeds of recovery
You might also like...
A MEED Subscription...
Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.