The UAE’s economy is resilient to low oil prices, the country’s Economy Minister Sultan Saeed Al Mansouri said on Tuesday.
“Oil had so far limited impact on the economy and that major infrastructure projects in Abu Dhabi and Dubai will continue,” Al Mansouri told reporters on the sidelines of the Federal National Council’s session.
According to Gulf News, Al Mansouri said a diversification policy under which the country’s dependence on oil steadily decreases year after year had helped the UAE neutralise the oil price decline.
Oil revenues currently contribute 30% to the UAE’s GDP, a drop from 90% in the 1970s.
Al Mansouri said the zero-deficit 2016 budget reflected the limited impact of the low oil prices.
“The UAE is the least affected country by low oil prices as non-oil sectors contributed nearly 69% of the GDP,” Al Mansouri said.
The UAE has continued to benefit from its perceived safe haven status and large fiscal and external buffers that have helped limit negative spill-overs from lower oil prices, sluggish global growth, and volatility in emerging market economies, the International Monetary Fund (IMF) said in August last year.
In a new update on the UAE’s economy, the IMF noted that the country’s non-oil growth remained robust at 4.8% in 2014, driven by construction, notably owing to capital spending in Abu Dhabi, and services underpinned by Dubai’s transportation and hospitality sectors.
The UAE’s dependency on oil will be just 5% of GDP by 2021, Shaikh Saif Bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Interior, told the Government Summit in February 2015.
