The UAE’s economy will grow at 2.3 per cent this year, slower than the 2.6 per cent rate projected for 2016, according to the latest data from the Central Bank.

“The slowdown is driven mainly by the fiscal consolidation and the expected fall of oil production in 2017 following the commitment of the UAE to the Opec production cut decision,” the bank said in its latest economic review.

This year the oil sector will expand at a rate of 0.8 per cent, while non-oil growth will be at 2.9 per cent.

The forecasts are based on revised new figures of growth projections and global economic developments, including the Brexit vote in the UK and uncertainty following the US presidential elections, it said. The economy will pick up momentum next year, however, forecast to grow at 3 per cent as both the oil and non-oil sectors gather pace.

“The UAE economy has shown a remarkable resilience to external and adverse oil price shocks,” the bank said.

Consumer prices rose 2.2 per cent in the fourth quarter as rents and utility costs increased. The banking sector improved at the end of last year compared to the third quarter as deposits and assets increased, the Central Bank said.

The UAE as a whole experienced strong non-oil private sector growth in December, with improved sentiment coming amid a rise in oil prices following agreed output cuts by both Opec and non-Opec producers, suggesting that businesses believe that the negative impacts of fiscal austerity may be tailing off.

An uptick in construction activity in Dubai in December helped to buttress the emirate’s non-oil economy, which expanded at the fastest rate since July, according to the latest guage of private sector business sentiment.

Across the key sectors of travel and tourism, wholesale and retail and construction, the seasonally-adjusted Emirates NBD Dubai Economy Tracker Index in December was at the highest levels since June 2015.

The gauge rose to 55.9 in Decem­ber, up from 55.2 in Nov­ember. A reading above 50 implies expansion and lower than 50 contraction.