The United Arab Emirates central bank has cut its forecast for economic growth this year after non-oil growth slowed slightly in the second quarter, according to a report released by the bank on Wednesday.
The central bank now expects the UAE’s inflation-adjusted gross domestic product to expand 2.3 per cent in 2018, instead of the 2.7 per cent which it had projected in its last report three months ago.
The non-oil part of the economy grew 3.6 per cent year-on-year in the second quarter, compared to a revised 3.8 per cent in the first quarter, which was the fastest rate since the beginning of 2016.
“Growth remained resilient in the second quarter of 2018, against the backdrop of firming oil prices, supportive fiscal policy and resilient tourism and related activities,” the central bank said.
Oil production shrank 1.7 per cent year-on-year in the second quarter because of output reductions agreed by oil producers globally.
The central bank now expects the non-oil economy to grow 3.6 per cent in the whole of 2018 while oil GDP shrinks 0.5 per cent; global oil producers have agreed to increase output in the second half of this year.
One factor weighing on the UAE economy has been a slump in real estate markets. In the second quarter, Dubai property prices fell 5.8 per cent from a year earlier and 1.7 per cent quarter-on-quarter, the central bank said. Abu Dhabi prices slipped 6.9 per cent year-on-year.