The UAE predicts its economy to grow 2.4% in 2019, fuelled by faster growth in the oil sector.

This is according to a central bank report published on Sunday.

The United Arab Emirates economy grew 1.7% in 2018, as per initial data released by the government.

The central bank’s forecast is more cautious than the forecast by the International Monetary Fund’s 2.8% growth projection for this year, bolstered by public spending as well as external factors.

Reuters reports the central bank expects the oil sector to grow 5% in 2019, compared to 2.8% in 2018, whilst the non-oil sector will grow 1.4%, marginally faster than last year.

Furthermore, the report stated the UAE economy posted estimated growth of 2.2% in Q2 compared to the year before, with non-oil real GDP up 1.5%.

The central bank stated: “Improved outlook for growth is due to expected rising public and private spending at the Federal and Emirate levels, higher investment ahead of the highly anticipated Expo 2020 and continued regional economic recovery, in light of the monetary policy easing in the U.S.”

Total government expenditure in the UAE increased to 119 billion dirhams ($32.40 billion) in Q1 of this year, according to the central bank report.

The oil sector is expected to grow in spite of recent action by oil producing nations to reduce output. This is because the UAE benefits from Abu Dhabi National Oil Co’s investment in value-added goods and services by over 400 billion dirhams over five years, it said.

In addition, employment within the private sector increased by 1.0% in Q2 2019 from the year before, compared to a 0.1% rise in the previous quarter.