Abu Dhabi's New Move to Spur Economy: Waiving, Slashing Fees
Abu Dhabi's New Move to Spur Economy: Waiving, Slashing Fees
(Bloomberg) -- Abu Dhabi is on another push to stimulate its economy.
This time the sheikhdom is waiving some business fees and slashing others after slowing growth in the non-oil economy has already pushed the United Arab Emirates to introduce a slew of measures, including longer-term visas for expatriates.
Abu Dhabi, the capital of the U.A.E., late Tuesday exempted private-sector companies from economic license fees for two years, waived municipal fees on 75 basic services and reduced others by 10 percent to 15 percent, state-news agency WAM reported. The changes take effect Dec. 1.
“The measures will help to reduce some short-term cost pressures on corporates and help to strengthen the competitiveness of the economy,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank. “However, given the soft demand backdrop and ongoing external challenges, we believe that the most immediate boost to non-oil activity will come from an increase in direct government spending.”
The International Monetary Fund expects the emirate’s non-oil economic output to grow 3.3 percent in 2019 compared with 2.5 percent this year and 1.8 percent in 2017. Abu Dhabi’s non-oil sector remains dependent on government spending, through development projects and state contracts. The private sector suffered as officials adopted austerity measures to plug budget deficits after oil prices slumped in 2014.
In terms of overall growth, the IMF sees neighboring Dubai outpacing the U.A.E. capital next year.
To contact the reporters on this story: Abbas Al Lawati in Dubai at aallawati6@bloomberg.net;Zainab Fattah in Dubai at zfattah@bloomberg.net
To contact the editors responsible for this story: Shaji Mathew at shajimathew@bloomberg.net, Amy Teibel, Mark Williams
©2018 Bloomberg L.P.