Central bank trumps IMF with 4.2% growth forecast
The United Arab Emirates central bank has raised its forecast for economic growth for 2019 despite non-oil growth slowing slightly in the second quarter. It now expects the UAE’s GDP to expand 4.2% in 2019, faster than the International Monetary Fund’s estimate. Mubarak Rashed al-Mansoori also reversed the downgrade in 2018 growth the bank has announced three months earlier, saying he now believed the grew 2.8% rather than 2.3%. Speaking in at the IIF MENA Financial Summit in Abu Dhabi, Mansoori said the UAE would avoid signi cant impact from the renewed US sanctions on Iran as long as banks were prepared for the consequences. The IMF has raised its growth outlook for the four years to 2021. The IMF’s October 2018 world economic outlook forecast the economy growing to 3.7% in 2019, up from the 3.0% it forecast in April. It sees 3.6% (3.2% in April) for 2020 and 3.2% (3.0%) in 2021. The non-oil part of the economy grew 3.6% year-on-year in the second quarter of 2018, compared to a revised 3.8% in the rst quarter, which was the fastest rate since the beginning of 2016. However, there was a marked slowdown in non-oil business growth in October 2018. The rate of growth weakened to a 26-month low. The survey of purchasing man- agers by Emirates NDB showed the headline index was 54.0 in December, down from 55.8 in November on a scale where a number over 50.0 indicates expansion.
Slowdown in housing market accelerates
The falls in residential house prices in the UAE’s two main markets on the back of the contraction in oil activity and falls in consumer con dence have showed signs of acceleration. Prices for Dubai’s residential real estate sank 7.4% in the third quarter of 2018 from a year earlier, with the drop accel- erating from a 5.8% fall in the second quarter, the UAE central bank said in a report in December 2018. Residential real estate prices in neighbouring Abu Dhabi, the other big emirate in the UAE, dropped6.1%year-on-yearinthethirdquarteraftera6.9%slideinthesecondquarter. AgentsJLL said in the third quarter of 2018, Dubai property prices fell 5.8% from a year earlier. In Abu Dhabi sales fell 3% on the quarter to take the annual decline to -12%, the same as the previous quarter. Knight Frank estate agents said mainstream residential prices in Dubai fell 6.4% over the year to June 2018. Prices across the city fell relatively evenly for both villas (7.5%) and for apartments (6.2%). Average sales prices across Abu Dhabi fell by 6.9%, a deterioration from the 7.2% in the previous quarter. Villa prices fell by 7.8% and apartment prices by 7.6% over the same time period.