The Central Bank of the United Arab Emirates (CBUAE) expects gross domestic product (GDP) to grow by 4.2 per cent in 2019, up from a stronger-than-expected 2.8 per cent growth this year, its governor said.
The CBUAE governor Mubarak Rashed al-Mansoori said, “Things are starting to materialise, growth is there, liquidity is there, a lot of government initiatives are there. I think we are in good times.”
Earlier in September the land said that it expected the country’s inflation-adjusted gross domestic product to expand 2.3 per cent in 2018.
But Mr Mansoori said on Tuesday that the bank hoped to close the year at 2.8 per cent for GDP growth, reports Reuters.
After a conference in Abu Dhabi today, he told reporters that growth forecasts for next year were mainly driven by oil, but there would be strong contributions from the non-oil sector as well.
The UAE introduced a 5.0 per cent value added tax (VAT) this year, as the country diversifies its economy away from oil revenues.
The VAT implementation has a one-time effect on inflation, which is expected to be 3.6 per cent, said the governor.
That is roughly in line with an IMF forecast of an average of 3.5 per cent this year, up from 2.0 per cent in the previous year.
Growth of the non-oil sector is expected to improve next year, with non-oil GDP growth at 3.7 per cent, compared to 3.3 per cent this year, said al-Mansoori.
He said the UAE did not expect a material impact on its economy from the United States latest sanctions on Iran.