DUBAI (Reuters) – The United Arab Emirates central bank has cut its forecast for economic growth this year after non-oil growth slowed slightly in the second quarter, according to a report released by the bank on Wednesday.
The central bank now expects the UAE’s inflation-adjusted gross domestic product to expand 2.3 percent in 2018, instead of the 2.7 percent which it had projected in its last report three months ago.
The non-oil part of the economy grew 3.6 percent year-on-year in the second quarter, compared to a revised 3.8 percent in the first quarter, which was the fastest rate since the beginning of 2016.
“Growth remained resilient in the second quarter of 2018, against the backdrop of firming oil prices, supportive fiscal policy and resilient tourism and related activities,” the central bank said.
Oil production shrank 1.7 percent year-on-year in the second quarter because of output reductions agreed by oil producers globally.
The central bank now expects the non-oil economy to grow 3.6 percent in the whole of 2018 while oil GDP shrinks 0.5 percent; global oil producers have agreed to increase output in the second half of this year.
One factor weighing on the UAE economy has been a slump in real estate markets. In the second quarter, Dubai property prices fell 5.8 percent from a year earlier and 1.7 percent quarter-on-quarter, the central bank said. Abu Dhabi prices slipped 6.9 percent year-on-year.