Mubasher: The UAE’s non-oil sector is expected to be bottomed out in 2019 in line with a series of reforms intended to boost the economy, as reported by Gulf Business, according to Bank of America Merrill Lynch (BofAML).

“The lender said Expo 2020 projects, a boost to corporate profits linked to a revised worker insurance scheme, AED 50 billion ($13.61 billion) fiscal stimulus plan announced by Abu Dhabi and the expansion of Abu Dhabi National Oil Company’s downstream operations could add 1% point to real non-oil GDP next year,” Gulf Business said.

Merrill Lynch said that “Over the medium term, we expect UAE non-hydrocarbon real GDP growth to increase to c3.5 per cnet, from 2.8 per cent in 2018F and 1.9 per cent in 2017.”

The UAE’s real GDP growth is expected to hit 1.9% in 2018 when compared to 0.5% in 2017.

The costs of stimulus plans, including cuts to fees in hospitality, aviation, and other sectors, on Dubai are expected to be modest, with a maximum fiscal cost of $1.2 billion that represents 1% of GDP assuming Dubai Municipality’s entire revenues are market rate revenues, BofAML added.

As for Abu Dhabi, they are deemed financeable, at 2% of GDP, due to increasing oil prices.

“Changes to visa and foreign ownership rules may improve foreign direct investment, population growth, private consumption and real estate demand, according to the bank,” Gulf Business said.

Dubai’s real GDP growth is expected to receive a 0.5 percentage point boost in 2018 and 2019, and 2 percentage point boost in 2020 and 2021 from hosting Expo 2020 and associated higher job creation, consumption, and tourists flows.

“Meanwhile, Abu Dhabi’s $13.61 billion stimulus plan could give a 0.4 percentage point boost to non-oil GDP, according to BofAML estimates,” Gulf Business said.