IMF has recommended further enhancing of cooperation across individual emirates of the UAE, including on the collection, sharing, and dissemination of economic data.
Ongoing structural reforms, such as those to support private sector employment and female labor force participation, increase trade and foreign investment, and harness the benefits of technology and education will help deliver sustainable and inclusive growth, the Fund said in a statement after concluding Article IV consultations with the UAE authorities for 2022 in Abu Dhabi.
The statement said reforms under the UAE 2050 Strategy are welcome and should be sustained, with a focus on diversification of the economy, to ensure a balanced energy transition and strong long-term economic growth.
Although the UAE has made significant progress on climate initiatives, prioritization should be given to low-carbon investments with the greatest economic significance and highest potential to reduce emissions and energy intensity, it added. This will be aided by ongoing major investments in renewable energy sources and work to develop a green taxonomy and mainstream green and sustainable finance.
The Fund welcomed the planned fiscal reforms, including the expected introduction of a corporate income tax and gradual phasing out of business fee structures. These should be further advanced to underpin a gradual, growth friendly fiscal consolidation in the context of a strong medium-term fiscal framework to maintain fiscal sustainability, it said.
Enhancement and careful coordination of emirate-specific fiscal anchors and rules would ensure a unified national fiscal stance, the Fund pointed out.
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