Tim Fox, the head of research and the chief economist of Emireates NBD, talks about the outlook for the UAE in the coming year.
What are your forecasts for the UAE economy in 2018? How will that growth vary between Dubai and Abu Dhabi?
The UAE’s economy likely grew 2 per cent in 2017, down from 3 recorded in 2016. The slower growth rate was entirely due to cuts to oil production, in line with Opec’s overall strategy to limit output and reduce excess supply in the global crude market – a strategy that supported the recovery in oil prices last year. The outlook for 2018 is constructive, and we expect growth to accelerate to 3.4 per cent. The oil sector is expected to contribute positively to overall GDP growth next year, as several GCC countries have indicated they will look to boost crude output gradually in the second half next year. Non-oil growth will likely be driven by public sector infrastructure investment rather than consumer demand. Our assumptions are for Dubai to grow by 4.2 per cent and for Abu Dhabi to grow by 2.9 per cent in 2018.
What are your forecasts for oil prices? How will the continued production cut deal impact government revenues?
We are projecting Brent to average US$56 per barrel up from $51 per barrel in 2017. The improvement in oil prices should continue to help boost government revenues next year, seeing budget deficits across the region fall. Higher oil prices in 2017 have helped the UAE’s fiscal position, and the budget deficit probably narrowed to around minus 3.4 per cent of GDP last year, from minus 4.3 per cent in 2016. Indeed, the UAE’s fiscal discipline and a more diversified revenue stream has resulted in it achieving the smallest budget deficit in the GCC in 2017. We expect a further narrowing of the UAE’s budget gap next year to minus 1.4 per cent of GDP, despite a forecast rise in government spending, as a result of both higher oil and non-oil revenue. Even with a stable oil price (averaging $56 per barrel in 2018 and $55 per barrel in 2019), the UAE’s budget should return to surplus in 2019.
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How will the introduction of VAT impact economic growth?
Households are likely to remain cautious when it comes to consumption in view of the new 5 per cent Value Added Tax (VAT), with growth being driven more by infrastructure spending next year. We expect inflation to accelerate to 3.5 per cent on average in 2018 from around 2 per cent in 2017 due to VAT.
Will higher infrastructure spending mainly impact Dubai, or will the economy as a whole benefit?
The 2018 Dubai budget makes provision for a sharp rise in infrastructure spending next year, focused on Expo 2020 projects and transport infrastructure. We also expect increased spending in other emirates to support ongoing projects, to the benefit of the UAE economy as a whole.
How will US interest rate rises impact the UAE economy in 2018, at a time when the country could benefit from looser monetary policy?
Monetary policy looks set to tighten further in 2018 consistent with an expected three 25 basis points interest rate rises by the US Federal Reserve. However, the pattern of recent years has been a compression of the spread between UAE and US interest rates, such that the gap is now the narrowest it has been since 2008. This looks set to continue meaning that the UAE may not see the full extent of the Fed’s tightening being passed on to consumers.
Tim Fox is the head of research and chief economist at Emirates NBD
Quick facts
- Storstockholms Lokaltrafik (SL) offers free guided tours of art in the metro and at the stations
- The tours are free of charge; all you need is a valid SL ticket, for which a single journey (valid for 75 minutes) costs 39 Swedish krone ($3.75)
- Travel cards for unlimited journeys are priced at 165 Swedish krone for 24 hours
- Avoid rush hour – between 9.30 am and 4.30 pm – to explore the artwork at leisure
The specs
Engine: 3.9-litre twin-turbo V8
Power: 620hp from 5,750-7,500rpm
Torque: 760Nm from 3,000-5,750rpm
Transmission: Eight-speed dual-clutch auto
On sale: Now
Price: From Dh1.05 million ($286,000)
The Specs
Engine: 1.6-litre 4-cylinder petrol
Power: 118hp
Torque: 149Nm
Transmission: Six-speed automatic
Price: From Dh61,500
On sale: Now
The specs
Engine: 2.9-litre twin-turbo V6
Power: 540hp at 6,500rpm
Torque: 600Nm at 2,500rpm
Transmission: Eight-speed auto
Kerb weight: 1580kg
Price: From Dh750k
On sale: via special order
UAE v IRELAND
All matches start at 10am, and will be played in Abu Dhabi
1st ODI, Friday, January 8
2nd ODI, Sunday, January 10
3rd ODI, Tuesday, January 12
4th ODI, Thursday, January 14
Most ODI hundreds
49 - Sachin Tendulkar, India
47 - Virat Kohli, India
31 - Rohit Sharma, India
30 - Ricky Ponting, Australia/ICC
28 - Sanath Jayasuriya, Sri Lanka/Asia
27 - Hashim Amla, South Africa
25 - AB de Villiers, South Africa/Africa
25 - Chris Gayle, West Indies/ICC
25 - Kumar Sangakkara, Sri Lanka/ICC/Asia
22 - Sourav Ganguly, India/Asia
22 - Tillakaratne Dilshan, Sri Lanka
MATCH INFO
Uefa Champions League, last-16 second leg
Paris Saint-Germain (1) v Borussia Dortmund (2)
Kick-off: Midnight, Thursday, March 12
Stadium: Parc des Princes
Live: On beIN Sports HD
GOODBYE JULIA
Director: Mohamed Kordofani
Starring: Siran Riak, Eiman Yousif, Nazar Goma
Rating: 5/5
Sarfira
Director: Sudha Kongara Prasad
Starring: Akshay Kumar, Radhika Madan, Paresh Rawal
Rating: 2/5
MEDIEVIL (1998)
Developer: SCE Studio Cambridge
Publisher: Sony Computer Entertainment
Console: PlayStation, PlayStation 4 and 5
Rating: 3.5/5
DUBAI WORLD CUP CARNIVAL CARD
6.30pm Handicap US$135,000 (Turf) 2,410m
7.05pm UAE 1000 Guineas Listed $250,000 (Dirt) 1,600m
7.40pm Dubai Dash Listed $175,000 (T) 1,000m
8.15pm Al Bastakiya Trial Conditions $100,000 (D) 1.900m
8.50pm Al Fahidi Fort Group Two $250,000 (T) 1,400m
9.25pm Handicap $135,000 (D) 2,000m
The National selections
6.30pm: Gifts Of Gold
7.05pm Final Song
7.40pm Equilateral
8.15pm Dark Of Night
8.50pm Mythical Magic
9.25pm Franz Kafka
MATCH INFO
France 3
Umtiti (8'), Griezmann (29' pen), Dembele (63')
Italy 1
Bonucci (36')
THE SPECS
Engine: 4.4-litre V8
Transmission: eight-speed automatic
Power: 523hp
Torque: 750Nm
Price: Dh469,000
If you go
The flights
There are direct flights from Dubai to Sofia with FlyDubai (www.flydubai.com) and Wizz Air (www.wizzair.com), from Dh1,164 and Dh822 return including taxes, respectively.
The trip
Plovdiv is 150km from Sofia, with an hourly bus service taking around 2 hours and costing $16 (Dh58). The Rhodopes can be reached from Sofia in between 2-4hours.
The trip was organised by Bulguides (www.bulguides.com), which organises guided trips throughout Bulgaria. Guiding, accommodation, food and transfers from Plovdiv to the mountains and back costs around 170 USD for a four-day, three-night trip.
Company Profile
Name: HyveGeo
Started: 2023
Founders: Abdulaziz bin Redha, Dr Samsurin Welch, Eva Morales and Dr Harjit Singh
Based: Cambridge and Dubai
Number of employees: 8
Industry: Sustainability & Environment
Funding: $200,000 plus undisclosed grant
Investors: Venture capital and government
KEY DATES IN AMAZON'S HISTORY
July 5, 1994: Jeff Bezos founds Cadabra Inc, which would later be renamed to Amazon.com, because his lawyer misheard the name as 'cadaver'. In its earliest days, the bookstore operated out of a rented garage in Bellevue, Washington
July 16, 1995: Amazon formally opens as an online bookseller. Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought becomes the first item sold on Amazon
1997: Amazon goes public at $18 a share, which has grown about 1,000 per cent at present. Its highest closing price was $197.85 on June 27, 2024
1998: Amazon acquires IMDb, its first major acquisition. It also starts selling CDs and DVDs
2000: Amazon Marketplace opens, allowing people to sell items on the website
2002: Amazon forms what would become Amazon Web Services, opening the Amazon.com platform to all developers. The cloud unit would follow in 2006
2003: Amazon turns in an annual profit of $75 million, the first time it ended a year in the black
2005: Amazon Prime is introduced, its first-ever subscription service that offered US customers free two-day shipping for $79 a year
2006: Amazon Unbox is unveiled, the company's video service that would later morph into Amazon Instant Video and, ultimately, Amazon Video
2007: Amazon's first hardware product, the Kindle e-reader, is introduced; the Fire TV and Fire Phone would come in 2014. Grocery service Amazon Fresh is also started
2009: Amazon introduces Amazon Basics, its in-house label for a variety of products
2010: The foundations for Amazon Studios were laid. Its first original streaming content debuted in 2013
2011: The Amazon Appstore for Google's Android is launched. It is still unavailable on Apple's iOS
2014: The Amazon Echo is launched, a speaker that acts as a personal digital assistant powered by Alexa
2017: Amazon acquires Whole Foods for $13.7 billion, its biggest acquisition
2018: Amazon's market cap briefly crosses the $1 trillion mark, making it, at the time, only the third company to achieve that milestone
MATCH INFO
Sheffield United 3
Fleck 19, Mousset 52, McBurnie 90
Manchester United 3
Williams 72, Greenwood 77, Rashford 79
Afcon 2019
SEMI-FINALS
Senegal v Tunisia, 8pm
Algeria v Nigeria, 11pm
Matches are live on BeIN Sports
Saturday's results
Women's third round
- 14-Garbine Muguruza Blanco (Spain) beat Sorana Cirstea (Romania) 6-2, 6-2
- Magdalena Rybarikova (Slovakia) beat Lesia Tsurenko (Ukraine) 6-2, 6-1
- 7-Svetlana Kuznetsova (Russia) beat Polona Hercog (Slovenia) 6-4. 6-0
- Coco Vandeweghe (USA) beat Alison Riske (USA) 6-2, 6-4
- 9-Agnieszka Radwanska (Poland) beat 19-Timea Bacsinszky (Switzerland) 3-6, 6-4, 6-1
- Petra Martic (Croatia) beat Zarina Diyas (Kazakhstan) 7-6, 6-1
- Magdalena Rybarikova (Slovakia) beat Lesia Tsurenko (Ukraine) 6-2, 6-1
- 7-Svetlana Kuznetsova (Russia) beat Polona Hercog (Slovenia) 6-4, 6-0
Men's third round
- 13-Grigor Dimitrov (Bulgaria) beat Dudi Sela (Israel) 6-1, 6-1 -- retired
- Sam Queery (United States) beat Jo-Wilfried Tsonga (France) 6-2, 3-6, 7-6, 1-6, 7-5
- 6-Milos Raonic (Canada) beat 25-Albert Ramos (Spain) 7-6, 6-4, 7-5
- 10-Alexander Zverev (Germany) beat Sebastian Ofner (Austria) 6-4, 6-4, 6-2
- 11-Tomas Berdych (Czech Republic) beat David Ferrer (Spain) 6-3, 6-4, 6-3
- Adrian Mannarino (France) beat 15-Gael Monfils (France) 7-6, 4-6, 5-7, 6-3, 6-2