UAE economy shockingly slows down

Official data showed that the UAE’s GDP grew by 1.73 percent in real fixed prices during 2018 compared to the previous year, declining significantly comparing government estimates, which had expected growth of up to 3 percent.

The lack of growth rates is expected according to previous government estimates, despite the rise in oil activities by a large percentage of about 35. One percent during the last year compared to 2017, according to data released by the Federal Competitiveness And Statistics Authority, and reported by the UAE news agency “WAM”.

“The economic growth in 2018 was based on the growth in oil resources resulting from the rise in the world oil prices on the one hand, and the growth in the activities of non-oil sectors on the other hand,” WAM quoted from the Economy Minister Sultan bin Saeed al-Mansouri.

The non-oil sector grew 1.3 percent in real fixed prices. The wholesale and retail trade activities accounted for 11.2 percent, the contribution of financial services activities was 9.2 percent, manufacturing activities 8.9 percent, construction and construction 8.3 percent.

UAE’s growth data after Dubai’s announcement last week that the emirate’s economy grew by 1.94 percent in 2018, the slowest pace since the 2009 recession when the economy was hit by a debt crisis.

Last December, the oil-producing UAE predicted growth of 2.5 to 3 percent in 2018 as Gulf economies benefited from higher oil prices, after OPEC and its allies cut output to oversupply.

In its latest quarterly report, the UAE Central Bank expected the economy to grow 2.8 percent in 2018, up from 0.8 percent in 2017.

Faced with a slowdown in economic growth, the Dubai government has taken action to cut costs in a number of key sectors, including aviation, real estate, and education.

The Abu Dhabi government has announced a $ 13.6 billion economic stimulus package as well as a number of economic initiatives to reduce business costs. The UAE forecast growth at 3.5 percent this year.

Data released by the Federal Competitiveness and Statistics Authority earlier this month revealed that the UAE economy is entering a recession, which threatens to expose the various sectors to further pressure.

The report showed that the inflation rate entered negative territory on an annual basis, recording 2.39 percent in January. The inflation rate is negative for the first time since 2017, according to data available from the Federal Authority.

Negative inflation, according to the classification of international financial institutions, including the International Monetary Fund (IMF), points to a decline in economic activity and a decline in credit due to a drop in money supply, which has a significant impact on production, pushing recession and increasing unemployment and financial stagnation.