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.

The pandemic’s potential impact on disputes

Tim Taylor, QC, discusses the impact of Covid-19 on the UAE's legal landscape and disputes market During a crisis, the legal expectation is ‘deals down – disputes and restructuring up’. While this ...

Dubai’s switch from strategic to tactical infrastructure could bode well for PPP

Cuts to government infrastructure spending may not be as disappointing in the future Dubai’s budget for 2019 was a disappointing one for the projects sector, with 22.6 per cent less spending ...

CONNECT SERIES: Keeping construction moving through Covid-19

How the steps taken to get construction through the Covid-19 crisis will lay the foundations for a better industry post crisis Construction companies in the UAE and across the GCC are ...

Commercial deliberations for renegotiation

A more nuanced and transparent approach to procurement can help clients and contractors negotiate better agreements in the long term This article is extracted from the report 'UAE Construction After Covid-19' Legal ...

UAE positions economy for recovery

Abu Dhabi's recovery depends on oil prices, while Dubai needs a rebound in aviation and tourism The UAE had 40,507 Covid-19 infections by 11 June, and although this number continues to ...

MEED and Mashreq renew partnership for third year

Partnership will grow to accommodate developments in sectors such as construction and energy MEED and Mashreq have announced the extension of their knowledge partnership for a third year. First established in 2017, ...

Short-term outlook for GCC projects market deteriorates

Heading into the final quarter of 2018, it seems that the regional market has yet to recover from the damage caused by low oil prices As we enter the final quarter ...

Signs of trouble ahead for Dubai’s construction market

Key indicators point to a potential crash looming in Dubai’s projects sector, with significant consequences for the regional market Architects are not prone to fretting, so when one recently described his ...

Driving better value in construction

Delivering world-class infrastructure today is essential to the success of the region tomorrow. Not only do today’s projects drive growth and create jobs, but they also lay the foundations for ...

Early contractor input is crucial for successful projects

Engineering Contracting Company’s CEO Kareem Farah says construction companies bring expertise that helps reduce project costs It is becoming increasingly important for developers and contractors to deliver quality projects efficiently as ...