A corporate and legal consultant, Dr. Shahram Shirkhani works with numerous clients in the United Arab Emirates (UAE). Over the course of his career, Dr. Shahram Shirkhani has provided counsel to multinational corporations throughout the Middle East and Europe.
Recently, officials from the International Monetary Fund (IMF) announced a series of recommendations for the UAE. In these reports, the organization discussed the country’s forecasted economic growth, rising housing market, outstanding debt, and generous energy subsidies. The IMF noted that although economists expect overall economic growth to slow, they still predict that the non-oil economy will experience 0.5 percent growth. Tourism has increased, and airports, shopping malls, and hotels have all reaped the benefits. Moreover, officials reported that property prices have experienced significant leaps over the last year, surging more than 35 percent in some cases. The IMF expressed concern that the country may fall into another boom-and-bust cycle, propelled by a bubble in the housing market, specifically as major development projects begin once again.
The IMF reports also discussed Dubai’s debt, which is presently at $142 billion, or 102 percent of the gross domestic product. Finally, the organization recommended that the government begin to reduce existing energy subsidies. In 2012, these subsidies amounted to 5.5 percent of the GDP. By cutting these funds, the country will be able to channel more monies into debt reduction and lower the risks associated with fluctuating oil prices.