A disappointing year for growth in the UAE

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
Four-year Mena projects market dip continues
After four difficult years, the outlook remains bleak for anyone hoping for a strong pick up in new project opportunities in the Middle East and North Africa With some $4.7tn of ...
READ MORE
Dubai allocates funding for PPP projects
Dubai has several PPP projects planned and awaiting contract award The Dubai Finance Department (DOF) has allocated AED1bn ($272m) for public-private partnership (PPP) projects in order to attract private sector investments, raise government service quality ...
READ MORE
New Thinking for the New Normal
The region-wide fiscal rebalancing triggered by the fall in oil prices since 2014 has had a profound effect of the region’s construction industry. Many of the issues that have dogged the ...
READ MORE
Construction
Dubai will increase its spending on infrastructure and construction projects by 43 per cent next year as it continues to prepare for Expo 2020 as well as invest in other ...
READ MORE
The Red Sea Development Company prepares to award $3bn of construction contracts
Upcoming contracts include work at the airport, infrastructure and building hotels across the 28,000 square-kilometre development The Red Sea Development Company (TRSDC) is preparing to award close to SR12bn ($3.2bn) of ...
READ MORE
Prospects start to brighten for GCC contractors
Outlook improving for contractors in the GCC, though challenges remain Q&A with Arun Mathur, Senior vice-president and head of contracting finance, Mashreq Bank   Q: What state is the GCC construction market in ...
READ MORE
GCC projects market slumps in 2018
Latest data from MEED Projects shows a continuing decline in the value of new contracts awarded The value of projects awarded in the GCC last year fell by 22 per cent ...
READ MORE
IMF
Medium-term growth prospects in the GCC remain subdued amid relatively low oil prices and geopolitical risks, according to a report by the Washington-based IMF issued on 14 December. The IMF says ...
READ MORE
Policy change needed to smooth logistics growth
Unified regulations would enable more evenly balanced logistics growth The opening of Jebel Ali Port in 1979 facilitated Dubai’s rapid transformation into a global logistics hub. In 2017, Jebel Ali Port ...
READ MORE
Governments refocus on public-private partnerships
Tightening fiscal space broadens Middle East opportunities for public-private partnerships once again Outside the power and water sectors, public-private partnership (PPP) projects have had only limited success in the Middle East ...
READ MORE
Four-year Mena projects market dip continues
Dubai allocates funding for PPP projects
New Thinking for the New Normal
Dubai to boost infrastructure spending by 43 per
The Red Sea Development Company prepares to award
Prospects start to brighten for GCC contractors
GCC projects market slumps in 2018
IMF says economic growth in GCC to remain
Policy change needed to smooth logistics growth
Governments refocus on public-private partnerships
09 November, 2017 | .By ELIZABETH BAINS