The economy of the United Arab Emirates will grow only marginally this year, the International Monetary Fund (IMF) has predicted.
Abu Dhabi, the emirate which underpins the UAE economy, can only expect a marginal growth of 0.3% this year due to shrinking oil revenues, an IMF official said in Dubai this week, also predicting oil to hover at $50 for the next few years.
The price of oil was halved between June and December 2014, but it has been on a slow recovery path since the start of last year, going past $60 a barrel this week.
This crash has caused the economies of the six Gulf Cooperation Council (GCC) countries, that include Saudi Arabia and the UAE, to spiral downwards in a tailspin.
“For the UAE in general, growth in 2017 is expected to be at 1.3% and next year 3.4% and…last year it was 3%,” Jihad Azour, the IMF’s director for the Middle East and Central Asia told reporters at a press conference.
According to Azour, UAE’s slowdown in growth this year is mainly down its decision to cut oil exports as part of an agreement in 2016 by members of the Organisation of the Petroleum Exporting Countries (OPEC) and other, major oil-producing states.
The OPEC states include the GCC states of Saudi Arabia, Qatar, and the UAE.
Azour said that Abu Dhabi’s economy is expected to grow by only 0.3% this year, down from a growth rate of 2.8 % in 2016, as its oil-based GDP is predicted to contract by 2.7%.
In 2018, however, Abu Dhabi can expect to grow by 3.2% in 2018, he added.
The OPEC cuts, which were first agreed upon in November 2016, have been extended to March next year.