The UAE's GDP will expand 3.5 per cent this year compared to 2.8 per cent in 2018, thanks to a Dh50 billion stimulus package announced last year and host of measures taken for the ease of doing business in each emirate across the country, according to Central Bank of the UAE's latest quarterly report released on Monday.
Non-oil GDP growth will grow at 3.4 per cent in 2019 against 2.6 per cent last year while oil GDP will expand at 3.7 per cent this year versus 3 per cent, the apex bank said.
It projects that non-oil GDP economic growth in the first quarter of 2019 will reach 3.1 per cent but will grow faster later. The overall GDP growth for the fourth quarter of 2018 is estimated at 4.4 per cent, driven by non-oil sector real growth, as well as accelerating oil production since October.
The International Monetary Fund had projected a 3.7 per cent growth in the UAE real's GDP for 2019 versus 2.9 per cent last year.
To support the growth momentum, federal and local governments have initiated measures during the second half of 2018 aiming to boost growth prospects in the UAE during 2019. In particular, the government of Abu Dhabi announced Dh50 billion economic stimulus package, as well as 10 economic initiatives to ease the cost of doing business and help boost the non-oil GDP over the medium term.
Moreover, the government of Dubai announced initiatives to stimulate growth focusing on reducing costs of key industries - including aviation, real estate and education - in addition to mitigating the cost of launching new businesses and lowering taxes.
These measures, along with the federal government announcement of new measures aiming at relaxing foreign ownership requirements and the introduction of 10-year visas for qualified labour and investors, should foster private investment inflows and retention of skilled workers.
These measures are expected to start influencing UAE growth prospects positively in 2019 as projections show that economic activity will improve in the non-oil sector due to the effects of the announced fiscal stimulus packages underpinned by the stronger fundamentals of the economy and improved market sentiments.
Meanwhile, central bank data showed that remittances in the last quarter of 2018 declined 7.7 per cent, or Dh3.3 billion, to Dh39.9 billion. India retained its position as the top recipient of remittances from the UAE, accounting for 34.2 per cent of the total outflow.
According to the 2018 UAE population statistics published by the Global Media Insight, 59.5 per cent of the expat population in the UAE originate from South Asian countries, and expats from India account for 27.5 per cent of the total expat population in the UAE.
The next five most important countries in the share of outflows of personal remittances were Pakistan (9.4 per cent), the Philippines (7.2 per cent), the US (5.9 per cent) and Egypt (5.5 per cent).