UAE reserves establish to rise 9% in 2016

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The gross official reserves of the UAE is anticipated to increase 8.9% to $83.7 billion in 2016 from $76.8 billion in 2015 and beat $118.4 billion in 2020 as the economy accelerates continuing intensification thrust in the next five years despite of the oil price drop an estimate by the International Monetary Fund reveals.

UAE reserves establish to rise 9% in 2016

UAE reserves establish to rise 9% in 2016

In combination with the stream in reserves, the UAE will also perceive a gradual raise up in its recent account surplus that has dwindled to an information low of 5% of gross domestic product. The calculation has been estimated that the present account surplus is on course to increase from $17.6 billion in 2015 to $22.6 billion or 5.9% of GDP in 2016, and would reach $33.4 billion by 2020.

The non-oil development in UAE, which remained strong at 4.8% in 2014, urged by construction, capital spending in Abu Dhabi and services strengthened by Dubai’s hospitality and transportation divisions which is approximated to slow down to 3.4% in 2015 and would pick up steam from 2016 and post a 4.6% development by 2020.

Progress in oil production will possible to moderate given the international supply excess. Yearly inflation is anticipated to increase to 3.8% in 2015. The complete fiscal balance this 2015 is approximated to go negative for the first time since 2009 to note a shortfall of 2.9% of GDP, but is expected to return to surpluses from 2016. The recent account surplus is also projected to fall of significantly to 5% of GDP and will gradually enhance with the projected gradual recovery in oil prices. Credit intensification is approximated to continue supportive of the activity.

Government investments should be preserved relative to non-hydrocarbon GDP to support infrastructure, while the implementation of GRE megaprojects should be gradual, in line with the expected demand. Close oversight and continued strengthening of debt management frameworks are crucial

Mohamed Dekkak

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