Dubai

Economic growth in Dubai will enter a period of “rapid acceleration” ahead of Expo 2020 aided by the emirate’s political stability and a pick up in oil prices, according to the International Monetary Fund.

Annual growth will average in excess of 5 per cent following a minor slowdown in 2016, Zeine Zeidane, the IMF’s mission chief to the UAE, said in an interview in Dubai on Monday. Dubai’s economy will expand by 3.3 per cent this year from 3.5 per cent in 2015, in part due to a slowdown in the construction industry, he said.

Dubai’s “diversified economy” is helping it to overcome the negative impact of lower oil prices felt by other regional exporters, Zeidane said. Dubai’s safe haven status in a region “ridden by conflict,” a weaker dollar and the strong performance of trading partners including India are also supporting the economy, he said.

The IMF expects the UAE to expand 2.3 per cent, Zeidane said. Growth in Abu Dhabi will slow to 1.5 per cent this year from 4.3 per cent in 2015, he said.

“In 2016, we think that we are at the lowest level of oil prices, the lowest level of economic sentiment because of that,” Zeidane said. “We want them to do the minimal fiscal consolidation, and as sentiment improves and oil prices rise” they can accelerate the pace of spending cuts, he said.