UAE GDP up by 1.7% in 2019, outlook for 2020 ‘uncertain’ – central bank
The United Arab Emirates’ GDP grew by an estimated 1.7% in 2019 compared to 1.2% in the previous year, the Central Bank of the UAE said in its annual report released on Monday (May 4).
The central bank estimates real GDP stood at 1,486 billion dirhams ($404.6 billion) in 2019. Real non-oil GDP accounts for 70.2%, or 1,043 billion dirhams and the rest, 443 billion dirhams, came from real oil GDP.
“Higher hydrocarbon output, as well as growth in non-hydrocarbon economic activity, supported the pace of overall economic growth in 2019,” said CBUAE.
Growth in the hydrocarbon sector reached 3.4% in 2019 compared to 2.5% in the previous year, according to the CBUAE.
Exports of hydrocarbon went down by 14.7%, or 36.2 billion dirhams ($9.86 billion) compared to 2018. The central bank attributes this drop primarily to lower prices of crude oil and other products.
Non-oil activities nudged up by 1% compared to a lower 0.7% in 2018.
Non-hydrocarbon exports went up by 1.1%, or 4.5 billion dirhams ($1.23 billion). The regulator says slower growth was mainly due to the slowdown in the global economy, including in the UAE's major export destinations.
IMPORTS
Total imports increased by 2.5%, equivalent to 21.2 billion dirhams ($5.77 billion) in 2019. This contributed to the fall in the trade balance by 40 billion dirhams.
There was a marginal increase in the travel and transport accounts in the country’s balance of payments. Net travel recorded an inflow of 12.6 billion dirhams ($3.43 billion), up very slightly from 12.4 billion dirhams in 2018. CBUAE says this is in line with inbound tourism in the country in 2019.
INVESTMENT
Net investment inflow went up, reaching 7.6 billion dirhams ($2.07 billion) in 2019 compared to 5.2 billion dirhams in 2018. CBUAE attributed this rise mainly to lower interest rates that resulted in lower outflow in investment income.
Transfers, however, saw a net outflow of 171 billion dirhams, representing a slight movement upwards compared to 2018’s 169.3 billion dirhams.
2020 OUTLOOK
The regulator said the economic outlook for 2020 remains uncertain because of the COVID-19 outbreak.
“The spread of COVID-19 is expected to impact trade and supply chain movements, coupled with travel restrictions which paves way for high volatility in capital markets and commodity prices,” said the central bank.
“While the outbreak is expected to negatively affect the global and domestic economies, it is still early to gauge the scale of the economic fallout.”
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