International Monetary Fund expects Economic recovery of UAE to Accelerate
The global Coronavirus pandemic had hit the world hard and had disrupted everyday life like never before. The virus first identified in December 2019 in Wuhan, China took a mere few months to spread across the globe and by March 2020 one by one several countries started getting infected and losing lives. As a countermeasure most countries opted to go on lockdowns because of which life almost came to a standstill and the economy worldwide took a big hit. Schools shifted to online classes while most people with the option to do so started doing work from home. Only the essential sectors like healthcare, banks, etc. stayed operational. Governments all over tried to implement the rule to restrict movement as much as possible. Masks and disinfectants became the mandates of the daily life.
Now that several vaccines had been made available and much of the population are vaccinated, the world is on the path to recovery. All the countries are trying to build up their economies again. The United Arab Emirates, the second largest economy of the Arab world, had been taking several measures to help the economic recovery and had been one of the nations in the forefront to do so successfully at a steady pace.
Following are few highlights that indicates acceleration of recovery of UAE’s economy in the future:
- The International Monetary Fund (IMF), a Washington-based lender, had predicted that UAE’s economic recovery is going to speed up in the near future. As per the IMF the economic recovery had already gained momentum and the trend should continue.
- The oil-based GDP of the country as always would be dependent on the production but is expected to grow. “Higher oil prices will lift the fiscal and external balances”- Ali Al Eyd, leader of the International Monetary Discussions.
- On the other hand, as per the International Monetary Fund, non-oil based GDP should exceed 3% by the end of 2021.
- According to the conclusion of Article IV consultation of International Monetary Fund with UAE officials, the economy should grow 3.1%.
- The prediction of IMF is higher than that of that of the Central bank of UAE. The Central bank had estimated UAE’s economy should grow 2.1% by the end of 2021 and up to 4.2% by the end of 2022.
- Moody’s Investors Service had assigned the UAE government’s global medium term-note program the (P)Aa2 foreign currency senior unsecured rating. The Aa2 is the third highest long-term credit ratings assigned to fixed income securities (e.g. government bonds) by Moody’s and it denoted low credit risk. As per Moody’s the domestic political stability in UAE, its large hydrocarbon reserves and high per capita income had attributed to the acquired rating.
- It is anticipated that within next two to three years UAE’s GDP will fully recover to pre-COVID times and that Abu Dhabi’s balance-sheet would stay the strongest in GCC.
- In the last year UAE’s economy had contracted 6.1%. “Early and strong” response to the pandemic along with a prompt and efficient vaccination drive that had seen maximum of UAE’s population (>93%) vaccinated in the current date are seeing the economy recover smoothly and quickly.
- The Expo 2020 that had been delayed is causing and would cause in the future a rise in economic activity as tourism increases.
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