Recent economic stimulus measures announced by Abu Dhabi and Dubai are expected to accelerate GDP growth in the UAE.
“Looser fiscal policy will provide a boost to the Gulf’s non-oil sectors and supports our view that GDP growth across the region, which fell to an eight-year low in 2017, will pick up this year,” according to a report by London-based Capital Economics.
Abu Dhabi’s stimulus package was launched in early June and comprises a set of initiatives covering infrastructure and legislative projects, as well as SMEs, and industrial and social projects.
“Abu Dhabi’s package amounts to an extra $13.6bn of spending over the next three years, equal to around 2 per cent of the emirate’s GDP per annum,” says the Capital Economics report.
US ratings agency Moody’s Investors Service expects the 5 per cent increase in spending to be fully met by increased oil revenues as the government adopted an oil price assumption of $50 a-barrel for its 2018 budget.
Abu Dhabi and Dubai have in recent weeks announced a string of other measures aimed at supporting economic growth. They include changes to visa regulations, 100 per cent foreign ownership of companies and reduced government fees.
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