A rapid rise in prices in Dubai
IMF warns of a potential real estate bubble in the UAE
The IMF raised its forecast for economic growth in the UAE this year to 4.5 percent but warned of a possible real estate bubble if operated with authorities. According to Reuters, the Fund confirmed that GDP growth for the UAE will remain strong and at the same level is now estimated for 2013, supported by continued momentum in the non-oil activity, indicating that growth fuelled by oil is slowing because of abundant global supply. According to Harald Finger, head of the IMF mission at the conclusion of his visit to the UAE real estate sector in particular witnessed a sharp recovery with a rapid rise of prices on the market for residential real estate in certain areas. The IMF predicted in Washington in October to record a GDP adjusted for inflation in the third largest oil exporter in the world, a growth of 3.9 percent in 2014, and 4 per cent in 2013.
Analysts predicted in a survey this month that growth in the UAE at 4.3 per cent in the period from 2013 to 2015, the IMF officials believed it was also expected to deliver growth in support of giant projects despite the total cost and that the pace of implementation and funding is uncertain and Dubai hosting the Expo 2020. The head of the IMF mission, that if these projects are not implemented judiciously, it could aggravate the risks of real estate bubble, echoing warnings issued by the Fund in November, June. Wenger pointed out the need to tighten policy further in the next phase to curb the rise in prices and to keep traffic under control, predicting that GDP growth for the oil sector in the country to 3 percent this year and 2.9 per cent in 2015, would likely be the non-oil sector growth to 5 percent this year and 4.8 percent in 2015.