11
ANNUAL REPORT 2015
ECONOMIC DEVELOPMENTS
Diversified economy
Growth of the UAE economy is expected to record
an annual increase of 4.4 per cent in 2015. The
UAE’s economic growth is expected to expand
by 4.4 per cent to USD 440.18 billion in 2015
from USD 416.44 billion in 2014, forecast Frost
& Sullivan, due to non-oil activities, greater public
sector spending and huge foreign reserves.
The UAE Central Bank stated that growth,
particularly in non-oil activities, is expected to
remain resilient, reaching 4.6 per cent during
the year 2015. But nonetheless, expected a
moderate decline in growth in 2015, capturing
a combined decline of activity in the non-energy
sector. This, they attributed to weaker than
expected growth in major underlying sectors,
coupled with more moderate growth in the
energy sector.
The International Monetary Fund (IMF)
expects that the UAE’s non-oil GDP will grow at
4.4 per cent in 2015
The IMF praised the UAE for its diversified
economy and subsidy reducing measures but
still made some recommendations for reform.
It said the Government should preserve
investment spending, control the public wage
bill, phase out subsidies while strengthening
safety nets, reduce transfers to Government-
related entities and mobilise more non-
hydrocarbon revenues.
Trends in oil prices and exchange rates are
projected to have mixed effects on current
accounts. While a deficit of 2.9 per cent of GDP
for 2015 is predicted, overall fiscal balance is
expected to return to surpluses from 2016.
The current account surplus is also projected
to decline substantially, to five per cent of GDP
and will slowly increase with the projected
gradual recovery in oil prices, while credit
growth is expected to remain supportive of
business activity.
