According to IMF, UAE's Economy is Making Progress Rapidly
Oxford Tax Solutions
23 November, 2014
According to the IMF, the United Arab Emirate economy (UAE) is making rapid progress and emerging from international financial crisis at a fast pace, although may be susceptible to decreasing oil prices.
The economy is steadily recovering due to the fact it has been enhanced by the construction, logistic and hospitality sector. Overall growth was strengthened by continuous public projects in Abu Dhabi, the UAEs largest oil producer, as well as the services sector in Dubai.
The UAE, is OPECs fourth leading supplier, was influenced greatly by the international financial crisis. The crisis slowed down the rate of economic growth extensively, which was recorded at 1.5% during 2007 until 2011.
The IMF estimates the UAE will close 2014 with a 4.25% economic growth, almost 1% less than the percent of growth it marked in 2013. The economy, excluding the oil-sector, is presumed to mark a 5.5% growth.
IMF cautioned that is the oil-price decrease continues, oil revenues will be affected significantly. Nonetheless, the IMF added that the UAE had adequate financial savings to minimise the impact the loss of revenue will have on the nation.
The IMF also noted that real estate prices stabilised during the summer. After a time where real estate soared, the slower pace and stabilisation of property prices is a good sign.
The IMF also stated that Dubai and all its government-related entities (GREs) have constantly depicted improvement after the 2008 crisis that hit Dubai. It added that some of the GREs had started to repay the debts before their payments were due.
Although, some GREs still carry debts, their strengthened financial position and maturity contribute to minimising debt-linked risks.
Dubai has recently paid $1.93 billion to debts, money which the emirate obtained from a sukuk (Islamic Bond), and further committed itself to repaying its debts on time.
During August, Nakheel settled all its bank debt amounting to $2.15 billion. The debt was due to be repaid in the next four years.
During March, Dubai succeeded in delaying the $20 billion debt it owed Abu Dhabi, which was owed this year. The debt is now due to be paid in the following five years.
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