The growth forecast for the UAE and most of the MENA region is projected to increase due to bsuiness-friendly policies of the government.
According to the latest report of the World Bank, the UAE’s growth was cut by 0.4 per cent and 0.2 per cent to 2.6 per cent for 2019 and 3 per cent for the next year, respectively, from its January 2019 forecast. While growth rate for 2021 remained at 3.2 per cent.
The 2019 growth outlook by the World Bank is higher than the UAE Central Bank‘s forecast of 2 per cent, which it predicted in its 2018 annual report released last month.
FocusEconomics commented in a note that growth should ramp up this year because of the large support focused on infrastructure investment for Expo2020.
The World Bank noted that the UAE’s reform of financing liberalisation for the small and medium enterprises will help relieve constraints in the corporate sector and support investor confidence.
The factors that would significantly contribute to the overall GDP growth are huge FDI inflow, state of the art infrastructure, higher energy prices, liberal visa policies and an important player in the Belt and Road equation.
The Global Economic Prospects 2019 report of the World Bank noted that an improved regulatory and business environment in the GCC would remain supportive of private sector activity.
GCC growth in non-oil private sector is getting easier fiscal stances and higher government spending.
The Mena economy is expected for expansion to 1.5 per cent in 2019, down 0.2 percentage points from last month’s forecast. For 2020, the Mena economy is projected to expand 2.8 per cent, said FocusEconomics.
Growth prospects in smaller oil importers such as Jordan, Lebanon, West Bank and Gaza are highly uncertain, however, as business and consumer confidence are contingent on anticipated reforms or foreign financial assistance.