The International Monetary Fund indicated that the UAE's economy continues to adjust to the mid-2014 oil price shock. It noted that activity in the non-hydrocarbon sector remains subdued due to ongoing corporate restructuring, a prolonged downturn in the real estate sector and tighter global financial conditions. It projected the UAE's real GDP growth to accelerate to 2.9% in 2018 and 3.7% in 2019, supported by higher oil production and increased government spending. It said that the government has started its economic stimulus plan amid large fiscal buffers, ample spare capacity, and rising investment needs for Expo 2020. It added that front-loading stimulus measures with a focus on productive spending would enhance the stimulus' impact on economic growth. It forecast the inflation rate to average 3.5% in 2018 due to the introduction of the value-added tax, but it noted that the inflation rate will moderate thereafter. It projected the current account surplus to exceed 7% of GDP in 2018-19.

Further, the Fund expected the fiscal deficit to remain at 1.6% of GDP in 2018, and to shift to a surplus in 2019. It considered that fiscal easing is necessary in the near term. However, it said that authorities should gradually return to a growth-friendly fiscal consolidation, as it forecast oil prices to moderate over the medium term. It noted that increased monitoring of contingent fiscal liabilities stemming from the borrowing by government-related entities (GREs), as well as from delays in payments and from public-private partnerships, would help mitigate fiscal risks. 
Source: International Monetary Fund