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.
Related Posts
Investors require a concerted display of political will to engage in the hundred billion dollars-worth of planned PPP projects across the region
Sustained low oil prices between 2015 and 2017 drove ...
READ MORE
Major petrochemicals producers have been making considerable capital investments in setting up derivatives complexes
The Middle East and North Africa (Mena) region is set to witness a gathering of pace in ...
READ MORE
The GCC’s Healthcare sector has been growing due to several demand drivers like population growth, increasing insurance coverage and availability of skilled manpower. These growth drivers coupled with government initiatives ...
READ MORE
Why the Gulf is set to lead the world in urban planning development and management
One of the most significant long-term trends around the world is the movement of the human ...
READ MORE
Right before the 20th century, specifically before the revolutionary discovery of Penicillin by Sir Alexander Fleming in 1928, the average lifespan of humans stood at a mere 48 years. That, ...
READ MORE
Sources of project funding will likely evolve in 2021 as liquidity challenges constrain capital spending
Liquidity challenges in the Middle East's investor community are paving the way for financially sound contractors ...
READ MORE
Abu Dhabi National Oil Company (Adnoc) has recently made good progress with several strategic onshore and offshore projects
The UAE has $123bn-worth of active project contracts under execution and projects valued ...
READ MORE
Local developer Emaar has received fresh bids for the contract to build the world’s tallest man-made structure in Dubai.
It is understood that at least two groups bid for the contract ...
READ MORE
As Abu Dhabi’s groundbreaking $1.6bn Strategic Tunnel Enhancement Programme (STEP) nears completion, the emirate’s wastewater company is now turning its focus to improving and rehabilitating existing infrastructure.
“We have spent the ...
READ MORE
New downloadable report from MEED, in partnership with Mashreq, examines the opportunities presented by blockchain for the construction sector
Why blockchain could be the solution to several of the challenges facing the construction ...
READ MORE
Finding a regional model for PPP
Petrochemicals sector poised for expansion
Integrated Sports Health and Wellness – A growing
Construction finance sector ripe for change
Adnoc schemes buoy UAE projects market
Emaar receives bids for world’s tallest tower in
Abu Dhabi turns its attention to efficiency
Blockchain for construction
09 November, 2017 | .By ELIZABETH BAINS
