March 31, 2019 / 6:43 AM / 5 months ago

UAE economy grew 1.7 percent in 2018 - state news agency

DUBAI, March 31 (Reuters) - The United Arab Emirates’ (UAE) economy grew by 1.7 percent at constant prices in 2018 compared to the previous year, slower than projected, according to state news agency WAM, which cited preliminary 2018 data.

The UAE growth figures follow Dubai’s disclosure last week that its economy grew 1.94 percent in 2018, its slowest pace since a contraction in 2009 when the economy was hobbled by a debt crisis.

Oil producer UAE had projected in December growth between 2.5 percent and 3 percent for 2018 with Gulf economies benefiting from higher oil prices after OPEC members and other producers cut output to tackle a supply glut.

In its latest quarterly report the Central Bank estimated the economy grew by 2.8 percent in 2018, up from a 0.8 percent growth a year earlier.

Economic growth in 2018 was driven by higher oil prices and a robust performance of the non-oil sector, Economy Minister Sultan bin Saeed al-Mansouri was quoted as saying by WAM late on Saturday.

Oil activities grew 35.1 percent in 2018 compared to 2017, according to preliminary data from the Federal Competitiveness and Statistics Authority cited by WAM.

The oil and gas sector was the single largest contributor to economic growth, accounting for 25.9 percent. The retail and whole trade segment accounted for 11.2 percent, the financial services sector 9.2 percent, manufacturing industries 8.9 percent, and the building and construction segment 8.3 percent.

The non-oil sector grew 1.3 percent at constant prices to 1.1 billion dirhams ($299.50 million).

To offset the slowdown in economic growth, the Dubai government has taken measures to cut costs for key industries including aviation, real estate, and education.

The Abu Dhabi government has announced a $13.6 billion economic stimulus package as well as several economic initiatives to ease the cost of doing business.

The UAE has projected growth of 3.5 percent for 2019.

The International Monetary Fund said in February it expects the UAE’s economy to grow by 3.7 percent this year. ($1 = 3.6728 UAE dirham) (Reporting by Alexander Cornwell Editing by Raissa Kasolowsky)

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