Dubai’s current slate of major infrastructure projects will provide one of the UAE’s main sources of non-oil growth in the run-up to 2020, NewsNow reported. But they could also be a domestic source of economic risk if not properly executed, according to the IMF. The IMF has predicted that the UAE’s economic growth will slow to 3.4% this year, before rebounding to 4.6% by 2020, supported by “the implementation of megaprojects and private investment in the run-up to Expo 2020”. If not prudently implemented, the biggest projects might “create additional macro-financial risks for Dubai’s government-related entitites, banks and ultimately the government in light of the debt overhang from the 2008-09 global financial crisis”, the fund warned. Indeed, despite successfully renegotiating a $20 billion refinancing of Dubai World this year, the emirate’s total government and GRE debt “continues to be substantial at around $143 billion. Government investments should be preserved relative to non-hydrocarbon GDP to support infrastructure, while the implementation of GRE megaprojects should be gradual, in line with the expected demand,” said the IMF.
