(Bloomberg) -- The International Monetary Fund expects the United Arab Emirates' economic growth to nearly triple next year as the country's largest sheikhdom, Abu Dhabi, benefits from an expected recovery in oil exports.
The U.A.E.'s gross domestic product will expand 3.4 percent in 2018 from 1.3 percent this year, largely on expectations that growth in oil-rich Abu Dhabi will surge to 3.2 percent from 0.3 percent this year, the IMF forecast. Dubai's output will accelerate more moderately, to 3.5 percent from 3.3 percent in 2017, the Washington-based lender estimated.
“The non-oil sector both in Dubai and Abu Dhabi is almost growing at the same speed, around 3 percent,” Jihad Azour, head of the IMF's Middle East and Central Asia Department, told reporters in Dubai on Tuesday. The recovery in Abu Dhabi, which holds about 6 percent of the world's proven oil reserves, will be helped by a recovery in oil output next year after the OPEC-led agreement to reduce production caused exports to decline this year, he said.
Abu Dhabi, the largest and wealthiest of the seven emirates that make up the U.A.E., consolidated its companies and state-owned entities as oil revenue dropped. The IMF expects oil prices to average $53 in the next two to three years. Saudi Arabia and Russia have indicated they support extending production cuts through 2018 to shore up prices.
The IMF expects Abu Dhabi's non-oil economy to grow 3.3 percent next year from 3.2 percent in 2017, Azour said.
To contact the reporter on this story: Zainab Fattah in Dubai at zfattah@bloomberg.net.
To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, Amy Teibel, Abbas Al Lawati
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