A disappointing year for growth in the UAE

09 November, 2017 | By ELIZABETH BAINS

The UAE is seeing muted growth in 2017, estimated at less than 1.5 per cent, as low oil prices and production cuts weigh on the economy.

The non-hydrocarbons sector is faring much better, with GDP growth of more than 3 per cent, but it is largely Dubai’s preparations for hosting Expo 2020 that have been driving the market.

Capital spending in Abu Dhabi (outside the hydrocarbons sector, which is having a strong year for contract awards) remains constrained, with the focus instead on completing megaprojects such as the new airport terminal, the $1.6bn strategic tunnel enhancement wastewater project and the Louvre museum, which is due to open in November.

To boost income, the federal government is introducing new taxes, beginning with excise duties on tobacco and carbonated drinks this month and VAT to follow at the start of next year. While this makes good sense economically, for the ordinary person it is another leap in the cost of living in the UAE.

With about 80 per cent the population comprising expatriates, it is essential the country remains an attractive lure for foreign workers. The rising costs coupled with stagnant wages risk tipping the balance. In this regard, it is fortunate that property prices are weakening. What would usually be seen as a negative economic barometer, falling rents and sales prices on this occasion will be welcomed by the authorities as helping to soften the blow of the new taxes being introduced.

Construction pendulum shifts towards infrastructure

Infrastructure will play an increasingly important role in the UAE as real estate activity slows down Led by Dubai, the UAE’s construction market has managed to buck the regional downturn and ...

Changing tides in project finance

Restructuring credit in accordance with the current environment is key to the survival of contractors and their projects, says Mashreq’s Mohammad al-Shouli This article is extracted from the report 'UAE Construction ...

MARKET TALK: Steel experts discuss competition

Faced with tough market conditions, steel producers need greater transparency and a clearer voice if they are to stay strong Q: How would you describe the structural steel market in the ...

Mena fiscal support averages 2.7 per cent of GDP

IMF regional director Jihad Azour says size of fiscal packages varied significantly across 12 Mena countries Countries in the Middle East and North Africa (Mena) region have dedicated an average of ...

Dubai’s Expo 2020 pavilions offer opportunities for contractors

While the focus is on key infrastructure for the event, the 170-plus international participants present both opportunities and challenges Visitors to the UAE would be hard pressed to find anyone who ...

Saudi Arabia seeks interest for urban rail PPP

National Centre for Privatisation is the client Saudi Arabia’s National Centre for Privatisation (NCP) has invited firms to express interest by 1 October for the contract to provide technical advisory services for the ...

Prequalification starts for Al-Maktoum airport terminal works

The Dubai airport expansion project is expected to cost $33bn Dubai Aviation Engineering Projects (DAEP) has invited contractors to prequalify for a major construction contract on the $33bn Al-Maktoum International airport ...

Mena projects and the impact of Covid-19

Latest exclusive findings and analysis on the impact of Covid-19 on the Middle East and North Africa projects market Click here to watch the latest update on the impact of Covid-19 and ...

UAE’s multi-modal strategy shifts up a gear

Etihad Rail’s link with Khalifa Port underscores the UAE’s commitment to integrated, complementary transport options As 2020 has progressed, it has become increasingly evident that the slowdown in UAE construction activity ...

Removing barriers in the value chain

The construction supply chain can greatly benefit from the application of supply chain management As the oil economies of the Gulf continue their rapid transition from growth driven by state-backed capital ...