UAE And Dubai Economic Outlook Positive | 2017
- January 1, 2017
- Posted by: RKonnect
- Category: Business & Economy
UAE Economy Forecast 2017
After a moderate growth of 3.1% in 2016, UAE economy is expected to clock higher GDP growth rate in 2017. Various quarters of economists suggest that the GDP growth rate of UAE should hover northwards of 4% in 2017 and subsequent years. This is due to the continuous efforts by the UAE government to diversify, de-regularize oil and reduce subsidies.
Moreover, the rise in momentum is driven by surge in non-oil sectors of the economy and actualization of long-term strategic plans such as Abu Dhabi Economic Vision Plan 2030, Dubai Plan 2021 and Dubai Expo 2020, which has infuse more efficiency into the system.
Mega Projects Worth USD 155 billion in Pipeline – UAE & Dubai
As a part of its long-term strategy to bolster economic diversification, the non-oil sectors of the UAE’s GDP is expected to expand in the coming time. It is estimated that as of mid of 2016, a total worth of USD 155 billion of projects were under construction and projects worth over USD 600 billion are in the pipeline. This is higher than the total project executed between 2006-15, which is estimated at around 500 billion.
Mega Projects of the Future – UAE & Dubai
In near future, major projects will come from hospitality, transport, power, construction and real estate domain, including the federal railway project, expansion of Al Maktoum International Airport, Abu Dhabi Light & Metro Rail Project and much more.
The push will also come from Dubai Expo 2020, Dubai Smart City Project and implementation of Abu Dhabi Economic Vision Plan 2030, which will pick up momentum. More international and regional investments are anticipated in Dubai in the run up to Expo 2020. It is believed that actual preparations for the event will take off in 2017. Likewise, as a part of Abu Dhabi 2030 Plan, the Emirate will seek more investment in greener technologies, tourism hub, social & physical infrastructure.
Together, such plans will not only induce direct positive impact on UAE economy but will also help in the expansion of job market. Thereby indirectly, inducing positive economic sentiments in the country.
In tandem with mega projects, UAE has been proactively taking new reforms to harmonise economic contingencies and smoothen the process of intended diversification. Recently fuel subsidies have been removed and the country is also in the process of introducing VAT tax from 2018.
Major Sectors to Watch out for – UAE & Dubai
Along with key sectors such as real estate / construction, retail, hospitality and tourism, Information & Technology (IT) and numerous other sectors are expected to move up the curve in 2017. With Purchase Manager Index (PMI) in 2016 staying mostly in excess of 50, it could be expected that local manufacturing sector would also play a more proactive role in 2017. PMI is an indicator of the economic health of manufacturing sector.
As a part of its long-term development, the UAE administration, underscores a stronger focus on the education sector. Similarly, UAE’s growing emphasis on capturing bigger slice of the global heath & medical tourism industry will translate into a stronger healthcare sector. This implies that both sectors should see a significant expansion in 2017.
2017 could also herald exciting time for tech based entrepreneurs. Various accelerators such as Impact Dubai, Dubai Technology & Entrepreneurship Centre (DTEC) and Flat6labs have been rolled out in the recent times to bridge the gap between entrepreneurs, customers and investors encouraging innovation led entrepreneurship as a source of employment and economic wellbeing.
UAE’s Economic Outlook Positive in 2017
The pounding of the petroleum prices since 2014 has entailed negative impact on the UAE’ economy to certain extent. However, when compared to other GCC nations, UAE still enjoys a much more stable economy thanks to its leadership which focused on economic diversification, a path that other GCC nations are now following. It is estimated that total public and private savings in UAE is in tune of around USD 500 billion, which eventually gives the country strong credit worthiness.
In addition, UAE’s economic ratings and performances have been phenomenal in 2016 as it was ranked among top 5 countries globally for Economic Openness, Business Environment, Infrastructure and Technological Advancements and Change Readiness. The rankings suggest that UAE’s economy outlook will continue to be positive in 2017.
Global Rankings – UAE Economic Performance
- UAE ranked 3rdfor Economic Openness Globally
- UAE ranked 4thfor Business Environment, Infrastructure & Technological Advancement
- UAE ranked 5thon Global Readiness Index
- UAE ranked 5thon Change Readiness Index
Investment Opportunities and UAE’s Future
A strong credit worthiness, higher liquidity, mega projects in pipeline and strong government will to reform and overhaul the system will act as a natural pull for foreign investors to make their presence in UAE. Moreover, UAE’s strategic location and geographical proximity to other major emerging markets in Middle East, Africa, South Asia and Caucasus adds further to its attractiveness, as the country could be favorable partner for international ventures to tap into new markets.
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