• Our Dubai regional hub office is now the base for one of the largest private sector teams of economists in the region and is also the global centre for our macro-economic consulting services, one of the firm’s main global business lines.  
  • The UAE and Middle East office in Dubai is headed by Scott Livermore, Managing Director and Chief Economist of Oxford Economics Middle East, following a move from New York where has was Chief Operating Officer for the US. As well as taking over leadership of Oxford Economics’ operations in the Middle East region, Scott also continues to head our macro consulting services worldwide, is a member of the firm’s senior management team, and leads many of the major projects for clients in the GCC countries and Asia.

Stimulus, oil output and investment to boost UAE growth to a three-year high

  • We expect the UAE economy to see a further acceleration in growth during 2019, with GDP set to expand by 2.2% this year, its strongest showing since 2016 and up from the 1.7% seen last year and more than four times the 0.5% rate registered in 2017, which marked an eight-year low.
  • Faster UAE growth is being supported by an expansionary fiscal stance at both the federal and emirate levels, rising oil production levels, and an improving investment climate ahead of Expo 2020.
  • The federal government has approved an expansionary budget for 2019, with spending projected to rise by 17.3%. This reflects the direction of spending by individual emirates, which show strong rises for 2019. As such, we expect higher government spending and investment to lift non-oil sector growth.
  • Despite the UAE’s relatively diversified economy, the hydrocarbon sector continues to play a key role, accounting for around 30% of GDP. Oil sector growth is expected to remain relatively strong this year at 2.5%, albeit slightly lower than last year’s 2.8%.  
  • UAE oil output averaged some 3.0m b/d in 2018 and prior to this week’s attacks on Saudi Arabia oil installations we expected it to rise to about 3.1m b/d in 2019.  It is uncertain at present whether the attacks will lead to any moves to change production targets by OPEC+ or to a prolonged upward move in oil prices. We will make a fuller assessment of the implications for the UAE as the extent and duration of the disruption to Saudi production and the medium-term impact on oil prices become clearer.
  • Strength in the tourism sector, increasing foreign direct investment, improving banking conditions, and stimulus plans by Abu Dhabi and Dubai are also expected to support the upbeat growth outlook for the UAE economy this year and next.
  • FDI in Dubai rose by 54% y/y in Q1 2019 and tourist arrivals rose by 3% in H1 2019, reaching 8.4m.
  • In the banking sector, total deposits rose 4.9% y/y in July, while domestic credit to the private sector increased by 2.2% y/y. Improved domestic economic activity and lower government financing needs should support private sector credit growth and activity in 2019.
  • Both Abu Dhabi and Dubai, which comprise 90% of UAE GDP, are embarking on stimulus plans aiming to facilitate doing business in the UAE, attract FDI, retain human capital and improve the overall business environment.

Steady growth over the medium-term

  • Improving economic sentiment and a gradual rise in oil output are two of the factors seen keeping GDP growth in 2020-22 at around the current pace.
  • In efforts to further diversify its economy the UAE aims to move to a knowledge-based economy by 2021, with the contribution of oil to GDP planned to fall to about 20% from some 30% currently. 
  • Robust business conditions and Expo 2020 are expected to support investment, helped by the UAE’s world-class infrastructure, abundant supply of labour, and political stability.

Commenting on the UAE’s economic prospects and Oxford Economics’ expansion in the region, Scott Livermore, Chief Economist, said: “With fiscal stimulus and a strong investment climate buoying economic conditions across the Emirates, and economic diversification set to underpin continued robust growth, prospects for the UAE in the years ahead look bright.  Coupled with the excitement around the upcoming Expo 2020, at Oxford Economics we think now is the perfect time to expand our operations and business in the UAE and across the wider Middle East.”

The full UAE forecast report is attached (PDF). Media may reproduce our charts with attribution to Oxford Economics.

If you do not currently receive our research regularly and would like to do so, please complete the media list request form or email Gary Duncan.

Media enquiries:

Re UAE forecasts and outlook: Mohamed Bardastani, Senior Economist, Middle East – mbardastani@oxfordeconomics.com   Tel: +971 55 368 1774 (Dubai)

Re Oxford Economics in the UAE and Middle East: Scott Livermore, Managing Director, Chief  Economist – slivermore@oxfordeconomics.com   +971 504 039 455 (Dubai)

Further media enquiries:

Gary Duncan, Director of Communications (Head of global media relations and PR):

gduncan@oxfordeconomics.com   Tel: +44 (0)20 3910 8025 | Mobile/Cell: 07788 155 715 (London)

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About Oxford Economics:

Oxford Economics is one of the world's foremost independent global advisory firms, providing reports, forecasts and analytical tools on 200 countries, 150 industrial sectors and 7,000 cities and regions. Its best-in-­class global economic and industry models and analytical tools provide an unparalleled ability to forecast external market trends and assess their economic, social, and business impact.

© Press Release 2019

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