{
  "title": "IMF Executive Board Concludes 2022 Article IV Consultation with United Arab Emirates",
  "publication": "IMF News, June 26, 2023",
  "sourceUrl": "https://www.imf.org/en/news/articles/2023/06/22/pr23234-uae-imf-executive-board-concludes-2022-article-iv-consultation-with-united-arab-emirates",
  "canonical": "https://www.imf.org/en/news/articles/2023/06/22/pr23234-uae-imf-executive-board-concludes-2022-article-iv-consultation-with-united-arab-emirates",
  "overlayPath": "/en/news/articles/2023/06/22/pr23234-uae-imf-executive-board-concludes-2022-article-iv-consultation-with-united-arab-emirates/index.md",
  "summary": "UAE economic growth strengthened in 2022, benefitting from a rapid and effective COVID response, supportive fiscal measures, and the benefits of earlier social and business-friendly reforms. Overall growth is expected to reach 6.9 percent in 2022, with non-hydrocarbon GDP growth of 5.",
  "publishDate": "2023-06-26",
  "sections": [
    {
      "heading": "Overview and 2022 performance",
      "content": "- Overall growth is expected to reach 6.9 percent in 2022.\n- Real non-hydrocarbon GDP growth of 5.3 percent in 2022.\n- Hydrocarbon GDP is expected to grow by 11.1 percent in 2022, following the OPEC+ agreement.\n- Inflation rose with global trends and is expected to ease to 3.4 percent in 2023.\n- Fiscal and external surpluses are expected to remain high on the back of elevated oil prices.\n- Banks are adequately capitalized and liquid overall, but nonperforming loans remain elevated, albeit down from recent peaks.\n- Real estate prices have risen sharply in some segments.\n- Major efforts advanced under the National AML/CFT Strategy and Action Plan to further strengthen the regulatory regime in line with enhanced Financial Action Task Force monitoring."
    },
    {
      "heading": "Outlook and risks",
      "content": "- Overall GDP is projected to grow at 3.6 percent in 2023.\n- Non-hydrocarbon growth projected at 3.8 percent in 2023, driven by continued tourism activity and increased capital expenditure.\n- Outlook subject to significant global uncertainties, including:\n  - Weaker growth,\n  - Tighter financial conditions,\n  - Geopolitical developments.\n- Implementation of enhanced UAE reform efforts poses upside risks to medium-term growth."
    },
    {
      "heading": "Executive Board assessment and main policy recommendations",
      "content": "- Commendations:\n  - Effective COVID response, timely policy actions, and structural reform implementation.\n  - Strong growth further supported by high oil prices.\n- Fiscal policy:\n  - Encourage maintaining a prudent fiscal stance in the near term while ensuring targeted support to those most in need.\n  - Consider a well-communicated withdrawal of remaining crisis-related macro-financial support.\n  - Additional fiscal reforms urged to broaden and diversify the revenue base and support adjustment to a lower carbon future.\n  - Welcome progress to enhance non-hydrocarbon revenue, including through the corporate income tax.\n  - Call for continued improvements to expenditure efficiency.\n  - Embed fiscal reforms in a credible medium-term fiscal framework, underpinned by stronger coordination of emirate-specific fiscal frameworks to support modest growth-friendly annual consolidation.\n  - Continue efforts to improve fiscal transparency and strengthen governance and accountability by publishing general government, emirate- and federal-level fiscal data.\n- Financial sector:\n  - Stress on ensuring financial system health to guard against risks and foster medium-term growth.\n  - Continued close monitoring of financial stability risks and further strengthening of macroprudential frameworks warranted, given high nonperforming loans, tightening financial conditions, and banks’ exposures to the real estate sector.\n  - Welcome major efforts under the National AML/CFT Strategy and Action Plan; encourage continued actions to strengthen the regulatory regime in line with enhanced FATF monitoring.\n  - Encourage the authorities to request a Financial Sector Assessment Program update to further assess resilience.\n- Structural reforms and diversification:\n  - Welcome ambitious structural reform agenda, including investment in digital and green initiatives to advance diversification and support a smooth energy transition.\n  - Recommend additional measures to improve the business environment and modernize the labor market, including continuing to encourage greater female participation.\n  - Welcome development of trade and economic partnerships expected to boost productivity and competitiveness.\n  - Encourage continued improvements in the collection and timely dissemination of economic data to support reform efforts."
    },
    {
      "heading": "Selected economic indicators, 2020–23 (exact figures)",
      "content": "- Quota: SDR 2,311.2 million (November 2022)\n- Population: 9.56 million (2021)\n- Per capita GDP: $43,422 (2021)\n\nOutput and prices (Annual percent change)\n- Real GDP: 2020: -5.0; 2021: 3.9; 2022: 6.9; 2023 (Proj.): 3.6\n- Real nonhydrocarbon GDP: 2020: -5.4; 2021: 5.8; 2022: 5.3; 2023 (Proj.): 3.8\n- CPI inflation (average): 2020: -2.1; 2021: 0.2; 2022: 4.9; 2023 (Proj.): 3.4\n\nPublic finances (Percent of GDP)\n- Revenue: 2020: 28.7; 2021: 30.4; 2022: 35.5; 2023 (Proj.): 33.0\n- Expenditures: 2020: 31.1; 2021: 26.4; 2022: 26.3; 2023 (Proj.): 27.8\n- Net lending(+)/borrowing(-) (Revenue minus expenditures): 2020: -2.5; 2021: 4.0; 2022: 9.2\n- Nonhydrocarbon primary balance 1/ (In percent of nonhydrocarbon GDP): 2020: -22.9; 2021: -20.5; 2022: -21.1; 2023 (Proj.): -22.6\n- Gross general government debt: 2020: 41.1; 2021: 35.9; 2022: 30.2; 2023 (Proj.): 29.8\n\nMonetary sector\n- Broad money: 2020: 4.6; 2021: 6.8; 2022: (no value listed)\n- Credit to private sector: 2020: -2.6; 2021: 1.5; 2022: 7.3; 2023 (Proj.): 5.2\n\nExternal sector (In percent of GDP, unless otherwise indicated)\n- Current account balance: 2020: 6.0; 2021: 11.6; 2022: 11.7; 2023 (Proj.): 7.6\n- External debt: 2020: 110.0; 2021: 97.3; 2022: 85.3; 2023 (Proj.): 86.8\n- Gross official reserves (billions of U.S. dollars) 2/: 2020: 106.5; 2021: 127.8; 2022: 130.9\n- In months of next year's imports of goods & services, net of re-exports: 7.2\n\nNotes:\n- 1/ In percent of nonhydrocarbon GDP. Excludes staff estimates of SWF investment income; partial coverage of Abu Dhabi government and Abu Dhabi pension fund accounts.\n- 2/ Excludes staff estimates of foreign assets of sovereign wealth funds; includes the 2021 SDR allocation of SDR 2.2 billion.\n\nPress Release No. 23/234; June 26, 2023. IMF Communications Department.\n\n---\n\n\n References\n\n- United Arab Emirates and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2023/06/22/pr23234-uae-imf-executive-board-concludes-2022-article-iv-consultation-with-united-arab-emirates"
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    "Published: June 26, 2023",
    "Overall growth is expected to reach 6.9 percent in 2022.",
    "Real non-hydrocarbon GDP growth of 5.3 percent in 2022.",
    "Hydrocarbon GDP is expected to grow by 11.1 percent in 2022, following the OPEC+ agreement.",
    "Inflation rose with global trends and is expected to ease to 3.4 percent in 2023.",
    "Fiscal and external surpluses are expected to remain high on the back of elevated oil prices.",
    "Banks are adequately capitalized and liquid overall, but nonperforming loans remain elevated, albeit down from recent peaks.",
    "Real estate prices have risen sharply in some segments.",
    "Major efforts advanced under the National AML/CFT Strategy and Action Plan to further strengthen the regulatory regime in line with enhanced Financial Action Task Force monitoring.",
    "Overall GDP is projected to grow at 3.6 percent in 2023.",
    "Non-hydrocarbon growth projected at 3.8 percent in 2023, driven by continued tourism activity and increased capital expenditure.",
    "Outlook subject to significant global uncertainties, including:",
    "Implementation of enhanced UAE reform efforts poses upside risks to medium-term growth.",
    "Commendations:",
    "Fiscal policy:",
    "Financial sector:",
    "Structural reforms and diversification:",
    "Quota: SDR 2,311.2 million (November 2022)",
    "Population: 9.56 million (2021)",
    "Per capita GDP: $43,422 (2021)",
    "Real GDP: 2020: -5.0; 2021: 3.9; 2022: 6.9; 2023 (Proj.): 3.6",
    "Real nonhydrocarbon GDP: 2020: -5.4; 2021: 5.8; 2022: 5.3; 2023 (Proj.): 3.8",
    "CPI inflation (average): 2020: -2.1; 2021: 0.2; 2022: 4.9; 2023 (Proj.): 3.4",
    "Revenue: 2020: 28.7; 2021: 30.4; 2022: 35.5; 2023 (Proj.): 33.0",
    "Expenditures: 2020: 31.1; 2021: 26.4; 2022: 26.3; 2023 (Proj.): 27.8",
    "Net lending(+)/borrowing(-) (Revenue minus expenditures): 2020: -2.5; 2021: 4.0; 2022: 9.2",
    "Nonhydrocarbon primary balance 1/ (In percent of nonhydrocarbon GDP): 2020: -22.9; 2021: -20.5; 2022: -21.1; 2023 (Proj.): -22.6",
    "Gross general government debt: 2020: 41.1; 2021: 35.9; 2022: 30.2; 2023 (Proj.): 29.8",
    "Broad money: 2020: 4.6; 2021: 6.8; 2022: (no value listed)",
    "Credit to private sector: 2020: -2.6; 2021: 1.5; 2022: 7.3; 2023 (Proj.): 5.2",
    "Current account balance: 2020: 6.0; 2021: 11.6; 2022: 11.7; 2023 (Proj.): 7.6",
    "External debt: 2020: 110.0; 2021: 97.3; 2022: 85.3; 2023 (Proj.): 86.8",
    "Gross official reserves (billions of U.S. dollars) 2/: 2020: 106.5; 2021: 127.8; 2022: 130.9",
    "In months of next year's imports of goods & services, net of re-exports: 7.2",
    "1/ In percent of nonhydrocarbon GDP. Excludes staff estimates of SWF investment income; partial coverage of Abu Dhabi government and Abu Dhabi pension fund accounts.",
    "2/ Excludes staff estimates of foreign assets of sovereign wealth funds; includes the 2021 SDR allocation of SDR 2.2 billion.",
    "[United Arab Emirates and the IMF](http://www.imf.org/external/country/ARE/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
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