UAE ECONOMIC OVERVIEW

It is generally agreed that the global economic recovery is now well on its way and gathering momentum. H.H. Sheikh Hamdan Bin Rashid Al Maktoum Deputy Ruler of Dubai and UAE Minister of Finance stated in the 2013 Annual report of his Ministry that the national economy of the UAE has achieved a significant growth rate of 4.5% during 2013, outperforming many powerful world economies. This can be attributed to the wise financial and economic policy adopted by the government at various levels, where the Government Financial Policy Coordination Council played an essential role that laid the foundations for solid growth of the national economy at higher rates in the coming years. However, at the global level, IMF is more cautious in its approach. A recent report1 suggests that although acute risks have decreased, but risks have not disappeared. In the United States, the recovery seems solidly grounded. In Japan, the policies of new government still need to translate into stronger domestic private demand for the recovery to be sustained. Adjustment in the south of Europe cannot be taken for granted, especially if Euro wide inflation is low. This uneven recovery may remain a cause for concern for the UAE in time to come. The recent fluctuation in oil prices and consequential movements in stock market has further confirmed a lack of solid foundation to support a global recovery.
By and large, the UAE has continued to benefit from its safe-haven status amid regional instability. The economic recovery has been solid, supported by the tourism and hospitality sectors, and a rebounding real estate sector. While growth in oil production moderated, public projects in Abu Dhabi and buoyant growth in Dubai’s service sectors continued to underpin growth. The real estate sector has been recovering quickly in some segments, especially in Dubai residential market. The renewed focus on the tourism sector will require a sustained support from the aviation sector.



1 World Economic Outlook - April 2014 (IMF)