Business heads remain bullish about UAE's economic growth

Despite being cautious about their expectations of the growth in GDP in the coming year, business heads across the UAE are confident about business conditions and the country's outlook, a recent survey has shown.  
According to the latest edition of the 'Business Barometer: UAE CEO Survey' carried out by Oxford Business Group (OBG), 77 per cent of respondents described their expectations for local business conditions for the year ahead as positive or very positive.
Speaking at the event, Dr Bernd van Linder, CEO of Commercial Bank of Dubai (CBD), noted that the new year was off to a good start. "Like many of my peers, I am positive about this year. The start of the year was marked by the introduction of the value added tax (VAT), which we can all agree is a very good thing, and which will bring huge economic benefits to the country."
Aside from generating revenues of an estimated $3.3 billion in 2018, rising to $5.4 billion in 2019, according to IMF estimates, the new tax will also play a key role in further enhancing the UAE's transparency levels, a key criterion for foreign investors. The results of the survey showed that 90 per cent of business leaders viewed transparency levels in the UAE as high or very high. However, they remained cautious in their expectations for GDP growth in the coming year, with less than one-quarter saying they thought the economy would expand by three per cent or more, below forecasts made by external analysts, which hover around the 3.4 per cent to 3.6 per cent mark.
Oliver Cornock, OBG's editor-in-chief and managing editor for the Middle East, said that the UAE is particularly well placed to take advantage of various supply chains. "The country benefits from a hugely well defined economic vision; not only does it have the vision, but it is also putting the flesh on it across various sectors. However, some challenges persist, such as translating more stable yet lower oil prices into a new economic model, managing the cost and quality of services and regional political volatility - which two-thirds of participants identified as the top external risk factor - the conclusions are largely, if cautiously, upbeat."
Speaking about the future, he also noted that greater integration, not less, is the key for future growth. "Globalisation has come under a lot of pressure today for a number of reasons, whether they be under current US president Donald Trump, Putin in Russia, or China's protectionism policies. However, we still see an interest in companies around the world looking beyond their borders."
While the Mena region was identified by 30 per cent of respondents as having the greatest potential for trade and investment flows, Cornock noted that it was also interesting to see that collectively, South Asia and East Asia accounted for 44 per cent of responses as the region holding the greatest potential; while sub-Saharan Africa received 14 per cent.
- rohma@khaleejtimes.com