2018-11-06
 
The central bank expects gross domestic product (GDP) growth of 4.2 percent in 2019, up from 2.8 percent in 2018, a level higher than expected, the central bank governor said on Tuesday.
 
"The economy is growing and liquidity is available, as are government initiatives," Governor Mubarak Rashid Al Mansouri told a conference in Abu Dhabi. "I think the UAE economy is going through a good period.
 
The central bank said in September it expected inflation adjusted GDP to grow 2.3 percent, but Mansouri said he hoped to reach 2.8 percent by the end of the year.
 
He later told reporters that the outlook for next year's growth was driven mainly by oil but there were strong contributions from the non-oil sector.
 
The UAE has implemented a 5 percent VAT this year while diversifying its oil-based economy.
 
The tax had an extraordinary impact on inflation, which is expected to reach 3.6 percent, largely in line with IMF forecasts of an average of 3.5 percent this year and a rise from 2 percent in 2017, he said.
 
The non-oil sector is expected to improve next year to 3.7 percent from 3.3 percent this year, Mansouri said.
 
He added that the UAE did not expect a significant impact on the country's economy due to the sanctions imposed on Iran.