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IMF Says UAE’s GDP Will Grow Over 6% In 2022

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IMF Says UAE's GDP Will Grow Over 6% In 2022

(CTN News) – The International Monetary Fund (IMF) has forecast that the UAE’s overall GDP will increase by over 6 percent in 2022, after it increased by 3.8% in 2021, propelled by a rebound in tourism, construction, and activities surrounding Expo 2020 Dubai, as reported by Bloomberg.

There has been an increase in inflation with global trends, and it is expected to average just over 5 percent this year, said Ali Al-Eyd, who led an IMF team that held discussions with UAE authorities from November 2-17 about the Article IV Consultation for 2022.

In addition IMF to the higher oil prices, the fiscal and external surpluses have also increased, although the temporary fiscal support provided by the Covid crisis has gradually waned as the pandemic has taken its toll on businesses and households.

As a result of increased global uncertainty, there have been larger financial inflows, contributing to the rapid rise in real estate prices” in some segments, according to the IMF.

In the first half of this year, the UAE’s non-oil foreign trade amount amounted to Dhs1.053tn, a growth of 17 percent over the same period last year.

During the first half of 2022, the country’s non-oil exports of goods and services amounted to almost 180 billion dirhams, an increase of 8 percent over the same period in 2021, while its tourism revenues exceeded $5 billion during this period.

There is a positive outlook for the UAE economy in the near term, with domestic activity supporting it. In 2023, we estimate that non-hydrocarbon growth will be around 4 percent, and with the implementation of ongoing reforms, we expect non-hydrocarbon growth to accelerate over the medium-term,” the fund announced.

The impact of tightening financial conditions is expected to moderate inflationary pressures gradually, which should result in a gradual decrease in inflationary pressures.

In addition, the federal government will also be able to support the growth of the domestic capital markets if it issues local currency debt as part of the development of the local capital markets.”

Moreover, Al-Eyd noted that there are significant external uncertainties related to the outlook, including the impact of global economic and financial headwinds, geopolitical developments, as well as the recently announced OPEC+ production cuts.

Following a report that suggested OPEC+ was considering an increase in output, crude oil prices plunged, but then recovered to end little changed following Saudi Arabia’s pushback against the suggestion. In early Asian trading, West Texas Intermediate held at a price close to $80 a barrel after swinging in a $5 range in the opening session of Wednesday’s trading session.

What exactly does the IMF do?

The International Monetary Fund (IMF) is an organization of 190 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

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