The Dubai Creek. The UAE's economy is forecast to expand 3.3 per cent this year. AFP
The Dubai Creek. The UAE's economy is forecast to expand 3.3 per cent this year. AFP
The Dubai Creek. The UAE's economy is forecast to expand 3.3 per cent this year. AFP
The Dubai Creek. The UAE's economy is forecast to expand 3.3 per cent this year. AFP

UAE economic outlook is 'positive', supported by strong domestic activity, IMF says


Massoud A Derhally
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The UAE's economic outlook is positive and is supported by strong domestic activity after it expanded at its fastest pace in more than a decade last year, the International Monetary Fund has said.

“UAE economic growth strengthened in 2022, benefitting from a rapid and effective Covid response, supportive fiscal measures and the benefits of earlier social and business-friendly reforms,” the Washington-based lender said on Monday at the conclusion of a consultation with Emirati officials.

On Sunday, the UAE's Federal Competitiveness and Statistics Centre said the economy grew by 7.9 per cent last year, after expanding by 3.9 per cent in 2021, supported by its non-oil sector, as the country continues with its diversification strategy.

The economy is forecast to expand by 3.3 per cent this year, reflecting oil production cuts agreed upon by Opec+ members, the UAE Central Bank said in its latest Quarterly Economic Review.

Strong reform efforts under the UAE 2050 strategies and advanced progress in comprehensive economic partnership agreements (Cepa) talks will boost trade and integration in global value chains and further attract foreign direct investment, the IMF said.

The UAE aims to boost trade and economic relations with countries around the globe and is working towards signing 26 Cepas as it seeks to attract more investment and diversify its economy.

The country has already signed Cepas with India, Cambodia, Georgia, Israel, Indonesia and Turkey. It is close to finalising a similar agreements with Kenya and has started talks with Costa Rica.

Through the agreements, the Emirates aims to eliminate unnecessary trade barriers, increase market access and set up investment and trade ventures with its partners.

It aims to deepen trade and investment ties with fast-growing economies in Asia, Africa and the Middle East, as well as attract $150 billion in foreign investment to its domestic non-oil industries and diversify its export profile.

The country aims to double the size of its economy to Dh3 trillion by 2031, with a focus on boosting non-oil exports and the tourism sector.

  • President Sheikh Mohamed delivers a speech remotely, to mark the signing of the Comprehensive Economic Partnership Agreement between the UAE and Turkey. Photo: Ryan Carter / UAE Presidential Court
    President Sheikh Mohamed delivers a speech remotely, to mark the signing of the Comprehensive Economic Partnership Agreement between the UAE and Turkey. Photo: Ryan Carter / UAE Presidential Court
  • Sheikh Mohamed follows proceedings during the signing of the agreement. Photo: Ryan Carter / UAE Presidential Court
    Sheikh Mohamed follows proceedings during the signing of the agreement. Photo: Ryan Carter / UAE Presidential Court
  • Sheikh Mohamed and President Recep Tayyip Erdogan of Turkey virtually attend the ceremony as Abdulla Bin Touq, UAE Minister of the Economy, right, Mehmet Muş, Minister of Trade of Turkey, centre, and Dr Thani Al Zeyoudi, UAE Minister of State for Foreign Trade complete formalities. Photo: Hamad Al Kaabi / UAE Presidential Court
    Sheikh Mohamed and President Recep Tayyip Erdogan of Turkey virtually attend the ceremony as Abdulla Bin Touq, UAE Minister of the Economy, right, Mehmet Muş, Minister of Trade of Turkey, centre, and Dr Thani Al Zeyoudi, UAE Minister of State for Foreign Trade complete formalities. Photo: Hamad Al Kaabi / UAE Presidential Court
  • The signing ceremony was held on Yas Island. Photo: Hamad Al Kaabi / UAE Presidential Court
    The signing ceremony was held on Yas Island. Photo: Hamad Al Kaabi / UAE Presidential Court
  • Mr Bin Touq, Mr Mus and Dr Al Zeyoudi, Saeed Thani Hareb Al Dhaheri, the UAE's ambassador to Turkey, and other dignitaries during the signing ceremony. Photo: Hamad Al Kaabi / UAE Presidential Court
    Mr Bin Touq, Mr Mus and Dr Al Zeyoudi, Saeed Thani Hareb Al Dhaheri, the UAE's ambassador to Turkey, and other dignitaries during the signing ceremony. Photo: Hamad Al Kaabi / UAE Presidential Court
  • The agreement is aimed at boosting trade between the two nations. Photo: Hamad Al Kaabi / UAE Presidential Court
    The agreement is aimed at boosting trade between the two nations. Photo: Hamad Al Kaabi / UAE Presidential Court
  • Dr Al Zeyoudi told journalists in Abu Dhabi that the agreement was a also milestone for the region. Victor Besa / The National
    Dr Al Zeyoudi told journalists in Abu Dhabi that the agreement was a also milestone for the region. Victor Besa / The National
  • Mr Bin Touq, Mr Mus and Dr Al Zeyoudi, Saeed Thani Hareb Al Dhaheri, the UAE's ambassador to Turkey, and other dignitaries during the signing ceremony. Photo: Hamad Al Kaabi / UAE Presidential Court
    Mr Bin Touq, Mr Mus and Dr Al Zeyoudi, Saeed Thani Hareb Al Dhaheri, the UAE's ambassador to Turkey, and other dignitaries during the signing ceremony. Photo: Hamad Al Kaabi / UAE Presidential Court
  • Mr Bin Touq, Mr Mus and Dr Al Zeyoudi, during the signing ceremony. Victor Besa / The National
    Mr Bin Touq, Mr Mus and Dr Al Zeyoudi, during the signing ceremony. Victor Besa / The National

The UAE's goods trade with the rest of the world hit $1.02 trillion in 2022, with exports and imports increasing due to higher crude oil prices, according to the World Trade Organisation's Global Trade Outlook and Statistics report released in April.

In addition to the trade partnerships, the IMF said the “benefits of artificial intelligence and digitalisation and investments in enabling infrastructure will further support economic diversification, foster a smooth energy transition and help address vulnerabilities from global decarbonisation efforts”.

It cited the UAE's “commitments to climate initiatives and a balanced approach to energy transition”.

Looking ahead, the fund said fiscal and external surpluses are expected to remain high on the back of elevated oil prices.

Banks in the Arab world's second-largest economy are adequately capitalised and liquid, while property prices have risen sharply in some segments, it said.

The fund also commended the Emirates on its “major efforts” to further strengthen its financial regulatory regime.

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Bantamweight:
Tariq Ismail (CAN) bt Jalal Al Daaja (JOR)

Featherweight:
Abdullatip Magomedov (RUS) bt Sulaiman Al Modhyan (KUW)

Middleweight:
Mohammad Fakhreddine (LEB) bt Christofer Silva (BRA)

Middleweight:
Rustam Chsiev (RUS) bt Tarek Suleiman (SYR)

Welterweight:
Khamzat Chimaev (SWE) bt Mzwandile Hlongwa (RSA)

Lightweight:
Alex Martinez (CAN) bt Anas Siraj Mounir (MAR)

Welterweight:
Jarrah Al Selawi (JOR) bt Abdoul Abdouraguimov (FRA)

In 2018, the ICRC received 27,756 trace requests in the Middle East alone. The global total was 45,507.

 

There are 139,018 global trace requests that have not been resolved yet, 55,672 of these are in the Middle East region.

 

More than 540,000 individuals approached the ICRC in the Middle East asking to be reunited with missing loved ones in 2018.

 

The total figure for the entire world was 654,000 in 2018.

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hall of shame

SUNDERLAND 2002-03

No one has ended a Premier League season quite like Sunderland. They lost each of their final 15 games, taking no points after January. They ended up with 19 in total, sacking managers Peter Reid and Howard Wilkinson and losing 3-1 to Charlton when they scored three own goals in eight minutes.

SUNDERLAND 2005-06

Until Derby came along, Sunderland’s total of 15 points was the Premier League’s record low. They made it until May and their final home game before winning at the Stadium of Light while they lost a joint record 29 of their 38 league games.

HUDDERSFIELD 2018-19

Joined Derby as the only team to be relegated in March. No striker scored until January, while only two players got more assists than goalkeeper Jonas Lossl. The mid-season appointment Jan Siewert was to end his time as Huddersfield manager with a 5.3 per cent win rate.

ASTON VILLA 2015-16

Perhaps the most inexplicably bad season, considering they signed Idrissa Gueye and Adama Traore and still only got 17 points. Villa won their first league game, but none of the next 19. They ended an abominable campaign by taking one point from the last 39 available.

FULHAM 2018-19

Terrible in different ways. Fulham’s total of 26 points is not among the lowest ever but they contrived to get relegated after spending over £100 million (Dh457m) in the transfer market. Much of it went on defenders but they only kept two clean sheets in their first 33 games.

LA LIGA: Sporting Gijon, 13 points in 1997-98.

BUNDESLIGA: Tasmania Berlin, 10 points in 1965-66

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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Updated: June 27, 2023, 6:56 AM