LONDON: The economic growth rate in Abu Dhabi is set to rise to 3 percent by 2022, up from 1.9 percent last year, ratings agency S&P said in a report distributed on Sunday.Real gross domestic product (GDP) growth is estimated at 2 percent this year, the agency added.“We forecast gradually rising real GDP growth, on the back of recovering oil production and a revival in investment,” it said.“We expect regional geopolitical tensions will, on balance, have a limited impact on Abu Dhabi, and expect continued domestic stability.”S&P said there is a “stable outlook” for the UAE capital, and that “its fiscal position will remain strong” over the next two years.“Abu Dhabi’s fiscal position is underpinned by significant oil production volumes and impacted by oil price movements, notwithstanding government efforts to increase non-oil revenue and subdue spending,” it added.Yet several risks remain in terms of growth projections, which could arise from a sharp fall in oil prices, tightening monetary conditions, and increased geopolitical uncertainties in the region, S&P said.In a separate report on Bahrain, S&P said that the government there “has made progress implementing fiscal consolidation measures.”These include a public sector voluntary retirement scheme and value-added tax (VAT) that were introduced earlier this year, S&P said.“However, we expect concerns regarding domestic stability will limit the pace and level of implementation of the government’s reforms,” it added.“We project real economic growth will average 2.4 percent over 2019-2022, supported by infrastructure investment.”
