UAE economy grew 2.9% in 2019

The Arab world's second-largest economy saw 7.6% growth in oil GDP and 1.1% rise in non-oil GDP

Dubai sky line with traffic junction and Burj Khalifa. Getty Images
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The UAE's economy grew by an estimated 2.9 per cent in 2019, accelerating from 1.7 per cent a year earlier, fuelled mainly by the country's oil industry.

The second-largest Arab economy's hydrocarbon sector grew 7.6 per cent in 2019 while the non-oil industry expanded by 1.1 per cent, the UAE Central Bank said in a report on Sunday.

"The hydrocarbon sector exhibited significant growth, mainly due to the two-digit growth in condensates and natural gas production," the regulator said.

The International Monetary Fund expects the UAE’s overall gross domestic product to grow by 2.5 per cent in 2020, the Washington-based lender said in November after concluding an Article IV Consultation with the UAE.

The UAE's fourth-quarter GDP grew by an estimated 1.3 per cent year-on-year, but slowed from a pace of 2.9 per cent in the third quarter, the Central Bank said.

In the fourth quarter of 2019, employment in the private sector increased by two per cent year-on-year compared with a 1.1 per cent rise in the previous quarter.

The UAE issued 38,765 net new work permits to expatriate workers in the fourth quarter, compared to 13,085 net new permits in the third quarter.

The Central Bank also said that average residential house prices continued to decline during the fourth quarter of 2019 in both Dubai and Abu Dhabi. However, the rate of the drop in average housing prices on an annual basis has "moderated" in both emirates from the previous quarter.

Property prices decreased by seven per cent in the fourth quarter of 2019 from the same period in 2018, compared to an 8.2 per cent drop in the previous quarter, the Central Bank said.

Average rents in both emirates continued to decrease year-on-year at a higher pace compared to the third quarter, the government body said.

"The Dubai market continues to exhibit decline in rent, due mainly to excess supply," the report said.

The UAE Central Bank said the rate of inflation in the country declined 1.6 per cent in the fourth quarter year-on-year, compared to a 2.1 per cent decline in prices in the previous quarter.

"The continued decline in the rent prices as well as the decline in domestic fuel prices contributed to deflationary pressures," the report said.

In terms of employment, hiring in the private sector increased 2 per cent in the fourth quarter year-on-year, compared to an increase of 1.1 per cent in the previous quarter.

All sectors marked an increase in employment on an annual basis, except the construction industry, the Central Bank said.

The construction sector —which contributes 32.2 per cent of total private sector employment—declined by 2.4 per cent in the last quarter of 2019 year-on-year, compared to a 2.3 per cent decline in the third quarter.

The report also showed that outbound personal remittances, based on data from banks and exchange houses, rose 1.8 per cent in the fourth quarter compared to the same period of 2018.

"This increase is in line with the increase in employment in the UAE during 2019 compared to 2018," the report said.