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United Arab Emirates Country Risk Report Q3 2018

United Arab Emirates Country Risk Report Q3 2018

The UAE will be one of Middle East's economic outperformers over the next decade. Its diversified economy and solid operational framework will see exports and investment continue to drive growth. It will also benefit from the 2020 Expo in Dubai, which will result in sustained investment inflows in the country's infrastructure.

Well-diversified Dubai will continue to outperform Abu Dhabi, whose economy will remain affected by the OPEC-stipulated oil production cuts throughout 2018.

Rising oil prices will support government revenues in the years ahead, enabling a return to surpluses this year. That said, continued spending on infrastructure projects and social services will somewhat limit these improvements.

We forecast inflation to tick up in 2018, driven by the introduction of VAT and by rising transportation costs. This will prompt the central bank to tighten monetary policy in line with the US Federal Reserve.

We maintain a favourable outlook for political stability in the UAE, owing to a small and affluent indigenous population, limited sectarian tensions and low risks of succession. Meanwhile, we expect foreign policy assertiveness to continue.


Executive Summary
Core Views
Major Forecast Changes
Key Risks
Chapter 1: Economic Outlook
SWOT Analysis
BMI Economic Risk Index
Economic Growth Outlook
Growth Picking Up As Oil Price Gains Spur Confidence
Abu Dhabi Economic Growth Outlook
Oil To Drive Economic Rebound
Dubai Economic Growth Outlook
Growth Accelerating On Expo 2020 And Improving External Conditions
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
Fiscal Policy And Public Debt Outlook
Oil Gains Will Facilitate Return To Budget Surplus In 2018
Structural Fiscal Position
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES, 2015
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
Monetary Policy Framework
TABLE: MONETARY POLICY FORECASTS
Outlook On External Position
TABLE: CAPITAL AND FINANCIAL ACCOUNT BALANCE
TABLE: BREAKDOWN OF IMPORTS IN 2016
TABLE: BREAKDOWN OF EXPORTS IN 2016
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
Chapter 2: 10-Year Forecast
The UAE Economy To 2027
Greater Caution, Slower Growth
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Chapter 3: Political Outlook
SWOT Analysis
BMI Political Risk Index
Domestic Politics
New Investment Regulations Offer Tailwinds For Diversification
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Stable Outlook, But Challenges Remain
Chapter 4: Operational Risk
Operational Risk
TABLE: OPERATIONAL RISK SCORES
Business Crime
TABLE: BUSINESS RESPONSE TO RISK IN THE UAE
Education
TABLE: UAE AND OECD AVERAGE STUDENT PERFORMANCE SCORES, 2015
Chapter 5: BMI Global Macro Outlook
Key Divergences Emerging In World Economy
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
TABLE: UNITED ARAB EMIRATES – MACROECONOMIC DATA & FORECASTS

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