DUBAI: The UAE economy is forecast to grow 4.2 percent in 2019, while the Emirate’s non-oil economy is expected to expand by 3.7 percent for the same year, the country’s central bank governor said on Tuesday.
“We tend to believe that Q3 GDP would be 3.1 (percent), non-oil GDP would be 3.3. We are hoping to close the year at 2.8 percent for the GDP and 3.3 percent for non-oil GDP and this is really coming from 2.5 percent in 2017,” Central Bank Governor Mubarak Rashed Al-Mansoori said during a speech at the MENA Financial Summit in Abu Dhabi, as reported by Zawya.
Last month, the International Monetary Fund said that the UAE’s economy was expected to grow by 2.9 percent this year and 3.7 percent next year.
The UAE Cabinet has announced last month a 17.3 percent increase in its federal budget spending for 2019, up to a predicted 60.3 billion dirhams ($16.4 billion), from 51.4 billion dirhams that was approved for 2018. The cabinet also announced that a forthcoming three-year federal budget would not run at a deficit.
Al-Mansoori added that inflation is expected to stand at 3.6 percent for the year.
“Due to the implementation of VAT, there is a one-time effect. So, we started in January at a high level but we have been declining ever since,” he said.
Inflation rose to 2.7 percent in January, from 1.5 percent the previous month, after a new 5 percent value-added tax was imposed on a majority of consumer products and services.
Al-Mansoori said inflation stood at 3 percent in September.
The UAE’s central bank chief also said that banks’ lending to the private sector had been “soft” at the beginning of this year, but has subsequently increased by 6.5 percent.
"In terms of our lending to the private sector, which I am sure a lot for journalists would like to see, we were soft at the beginning of the year but now we are starting really to pick up,” Al-Mansoori said.
“The private sector is really a key sector for the UAE and for future growth,” he added.
The UAE introduced a new debt law last month. The new regulation will allow the government to start issuing sovereign bonds in the local currency.
The governor said the UAE has managed to diversify 77 percent of its economy in the aftermath of the fall in oil prices that began in 2014.
He praised the country’s move to cut subsidies and implement other reforms to combat the drop in oil prices.
UAE economy to grow by 2.8% this year, 4.2% in 2019 — central bank governor
UAE economy to grow by 2.8% this year, 4.2% in 2019 — central bank governor
- Inflation is expected to stand at 3.6 percent for the year
- The UAE has managed to diversify 77 percent of its economy in the aftermath of the fall in oil prices that began in 2014
Saudi ports brace for cargo surge as shipping lines reroute
RIYADH: Preliminary estimates suggest that several global shipping lines could reroute part of their operations to Saudi Arabia’s Red Sea ports, potentially adding 250,000 containers and 70,000 vehicles per month, according to Rayan Qutub, head of the Logistics Council at the Jeddah Chamber of Commerce, in an interview with Al-Eqtisadiah.
“Any disruption in the Strait of Hormuz not only affects maritime traffic in the Arabian Gulf but could also reshape global trade routes,” Qutub said, highlighting the strait’s status as one of the world’s most critical maritime chokepoints for energy and goods transport.
With rising regional tensions, international shipping companies are reassessing their routes, adjusting shipping lines, or exploring alternative sea lanes. This signals that the current challenges extend beyond the Arabian Gulf, impacting the global supply chain as a whole.
Limited impact on US, European shipments
The effects of these developments will not be uniform across trade routes. Qutub noted that goods from China and India, which rely heavily on routes through the Arabian Gulf, are most vulnerable to disruption. In contrast, shipments from Europe and the US typically traverse western maritime routes via the Suez Canal and the Red Sea, making them less susceptible to regional disturbances.
Saudi Arabia’s strategic location, he emphasized, strengthens the resilience of regional trade. The Kingdom operates an integrated network of Red Sea ports — including Jeddah, Rabigh, Yanbu, and Neom — that have benefited from substantial infrastructure upgrades and technological enhancements in recent years, boosting their capacity to absorb increased cargo volumes.
Red Sea bookings
Several major carriers, including MSC, CMA CGM, and Maersk, have already opened bookings to Saudi Red Sea ports, signaling a shift in operational focus to these strategically positioned hubs.
However, Qutub warned that rerouted shipments could increase sailing times. Cargo from Asia, which normally takes 30-45 days, might now require longer voyages via the Cape of Good Hope and the Mediterranean, potentially extending transit to 60-75 days in some cases.
These changes are also reflected in rising shipping costs, driven by longer routes, higher fuel consumption, and increased insurance premiums — a typical response when global trade patterns shift due to geopolitical pressures.
Qutub emphasized that Saudi Arabia’s transport and logistics sector is managing these developments through coordinated government oversight. The Ministry of Transport and Logistics, the Logistics National Committee, and the Logistics Partnership Council recently convened to evaluate the impact on trade and supply chains. Regular weekly meetings have been established to monitor developments and implement solutions to safeguard the stability of supplies and continuity of trade.
He noted that the Kingdom’s logistical readiness is the result of long-term strategic investments, encompassing ports, airports, road networks, rail systems, and logistics zones. Today, Saudi logistics integrates maritime, land, rail, and air transport, enabling a resilient response to global disruptions.
Qutub also highlighted the need for the private sector to continuously review logistics and crisis management strategies, develop alternative plans, and manage strategic stockpiles. Such measures are essential to mitigate temporary fluctuations in global trade and ensure smooth supply chain operations.
