Diversification contributes to resilience of UAE economy
Doha Bank hosted a knowledge sharing event awith speakers including Craig Wing, Partner and Future Strategist at Future World and Kamal Sharma, Director and G10 FX Strategist, Bank of America Merrill Lynch Global Research.
According to IMF Jan 2017 global growth is expected to be at 3.1 per cent. Advanced economies are now projected to grow by 1.9 per cent in 2017. Emerging and Developing economies growth is currently estimated at 4.5 per cent for 2017. Recently we have seen Britain has triggered Article 50 and we need to see how Brexit negotiations shape up, said Dr. R. Seetharman, CEO of Doha Bank, speaking at the event titled “New World order and Opportunities”.
“We are yet to see progress on initiatives from US on tax and infrastructure. The Fed’s monetary tightening continues with its last hike this March. Interestingly most of the emerging economies financial markets are buoyant despite the fed action. At the recent Kuwait meeting the oil producers had agreed to review whether a global pact to limit supplies should be extended by six months based on review of oil market conditions. In response to fed action most of the GCC central Banks have hiked rates in last December and in March this year. Some of the GCC Sovereigns such as Kuwait and Oman have come up with bond issues this year and fiscal reforms are going to continue in GCC. The progress is also happening on VAT implementation across GCC. Taking these developments into consideration we need to anticipate what policy shifts could do for the world and regional economic outlook. There are risks associated with political uncertainty, trade frictions and adverse effects of a rising dollar. The capital rules for Banking sector getting redefined and the financial markets are getting more volatile on account of the changing dynamics. We’re entering a new stage of international global relations where national policies could shape how globalisation eventually develops.”
Seetharman gave insight on key developments in UAE economy, saying that the UAE economy expected to grow by close to three per cent. Non-oil sectors grew 3.6 per cent year on year in 2016 and could grow further this year. The UAE banking sector had witnessed a lending growth of 5.2 per cent 2016 with private sector being a major contributor to growth close to five per cent. Total investments in the UAE’s industrial sector rose to AED 130 billion by end of 2016. As part of Abu Dhabi’s Economic Vision 2030, the contribution of the non-oil sector is aimed to be 64 per cent of GDP. Abu Dhabi in 2016 had set a target to double the size of its industrial base to 10 per cent of GDP by 2030. Abu Dhabi’s 10 biggest projects with a combined value of Dh134 billion are expected to be completed by 2020. The trade balance between Qatar and UAE had reached $7bn in 2015. Qatar and UAE look for diversifying investment opportunities in the tourism, logistics and IT sectors. In Abu Dhabi affordable housing witnessed significant activity in 2016. The economic diversification in UAE is expected to continue amidst low oil prices which contributed to resilience of UAE economy.
Wing highlighted the emerging trends from digitisation, climate change. He gave insight on internet breakthrough and on internet of things and impact from artificial intelligence. He also gave comparison between bitcon and gold, the impact of experienced economy, and how to embrace future.
Sharma gave insight on significant global developments, key factors impacting US dollar, US actions on growth, protectionism and tax cuts. He also highlighted that “Hard Brexit” looms and developments impacting, Pound, Euro and Yen.