Stimulus measures will boost UAE GDP

18 June 2018
Abu Dhabi and Dubai have made a string of announcements that aim to improve the competitiveness of the UAE economy

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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