The UAE economy is expected to grow 4.2% in 2019 due to higher oil prices and a stronger non-oil sector, the governor of its central bank told reporters at the IIF MENA Financial Summit in Abu Dhabi on Tuesday.
Mubarak Rashed al-Mansoori said the UAE will avoid significant impact from the renewed US sanctions on Iran as long as banks are prepared for the consequences.
In September, the central bank said it expects the UAE’s inflation-adjusted GDP to rise 2.3% in 2018, however, Mansoori said the year will likely close at a 2.8% growth.
This week, Fitch Ratings also said higher oil prices are resulting in a quick rebound of revenue and increased government expenditure. It comes after significant reforms saw the UAE cut its spending in 2015 and 2016, resulting in slow economic growth.
While the UAE and Iran have long maintained a close trading partnership due to their geographic proximity, political tensions have negatively affected their ties. On Monday, the US renewed its sanctions on Iran in a bid to limit its oil and shipping industries.
Only two Iranian banks, Bank Melli and Bank Saderat, will continue to operate in the UAE since their operations are limited to Iranian customers living in the country, Mansoor said.
Jameel Ahmad, global head of Currency Strategy & Market Research, said it’s a credit to the UAE that its economy is expecting a significant increase of economic output next year at a time where many economic forecasts around the world are being revised lower due to numerous global uncertainties.
Source Credit: Arabian Business