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UAE Central Bank expects 2.4 percent GDP growth

Christian Fernsby ▼ | September 23, 2019
Real economic growth in the UAE, as estimated by Central Bank of the United Arab Emirates, exhibited Y-o-Y growth of 2.2 percent in Q2 -2019, lower than in the previous quarter.
UAE Central Bank
Middle East   UAE Central Bank
The bank expects national economy to grow 2.4 pc in 2019, driven by faster growth in the non-oil sector.

Topics: UAE GDP

Non-oil GDP growth is estimated to have grown from 0.3 pc in Q1 to 1.5 pc in Q2. However, oil GDP growth is estimated to have moderated from 12.4 pc in 2019 Q1 to 4 pc in 2019 Q2, according to the CBUAE's Quarterly Review.

The pickup in non-oil activities is also reflected in the rise in the Purchasing Managers' Index , which reached an average of 58.2 in Q2 2019. Meanwhile, employment in the private sector increased Y-o-Y by 1 pc in Q2 2019.

Y-o-Y CPI inflation remained negative in the second quarter at -1.6 pc due to negative inflation for both Tradables (-1pc) and Non-Tradables (-1.8pc).

In addition to the fading impact of the VAT, tradable inflation declined due to low international inflation and an appreciating Dirham, while nontradable inflation declined due to declining prices, particularly in housing.

In the second quarter of 2019, customer deposits at banks increased on a yearly basis led by a rise in government deposits. On the other hand, credit continued its growth, underpinned by healthy Financial Soundness Indicators (FSIs) that underline a sound and stable banking system.