The economic environment in the United Arab Emirates (UAE), a federation of seven territories that is now one of the most important financial centres in the Middle East, remains challenging.
Property prices in many locations have dropped, oil prices have slumped and the implementation of a 5% VAT tax on goods and services in January is said to have impacted spending.
However, while the economy has been sluggish, the UAE received a boost in September when the International Monetary Fund (IMF) increased its 2018 GDP forecast for the region from 2% to 2.9% following rebounding oil prices and increased government spending. It came after the government revealed a plan to implement an economic package of AED50bn (£10.5bn) to boost Abu Dhabi’s growth and create new jobs. This was followed by news that Dubai was devising a tourism plan to attract 21-23 million tourists by 2022 and 23-25 million by 2025.
There remain restrictions on political activity in the traditionally conservative region and the government presides over strong control of media output. However, the World Economic Forum ranks the UAE as the most competitive country in the Middle East and 17th globally, ahead of Saudi Arabia, which it ranks as 30th.
The retail outlook
Given the fall in oil prices, impact of online spending and the implementation of the 5% VAT tax, the retail industry has experienced tough trading conditions.
However, there continues to be strong demand from foreign retailers to open stores across the UAE. In fact, Dubai was recently named the most important shopping destination worldwide, according to a report by CBRE. It said that over the next three years more than 16 million sq ft of new retail space could be launched in Dubai.