For nearly two years, the UAE economy has been cautiously charting its course through a massive global economic turbulence caused by multiple waves of Covid-19 infection.
The latest growth forecast from the Central Bank of UAE (CBUAE) exudes confidence in the UAE’s ability to transform the gradual economic recovery achieved during the past 18 months into a solid growth in 2022 and beyond. The Quarterly Economic Review of the CBUAE for the third quarter on 2021 forecasts 4.2 per cent GDP for 2022, double the growth achieved in 2021 supported by healthy growth in both oil and non-oil sectors.
The central bank’s forecast is justified by the broad macroeconomic trends during the past 12 months such as healthy increase in public spending, positive outlook for credit growth, higher employment and better business sentiment backed by Dubai Expo 2020 and the expected tourism gains from events such as the Fifa World Cup in Qatar this year.
Full commitment
Right from the outset of the Covid-19 crisis, the UAE authorities were convinced that it is not fear, rather courage, fortitude and a strong commitment to public safety and unwavering support to the domestic economy that should guide the nation through this unprecedented cataclysm.
Nearly, two years into the pandemic, the UAE has been largely successful in addressing concerns related to public health and economic recovery.
The speedy fiscal and monetary policy support measures from the government and the Central Bank of UAE (CBUAE) have been instrumental in the resilience of the economy and the banking system. While the huge monetary support such as the Dh256 billion Targeted Economic Support Scheme (TESS) from the CBUAE has been instrumental in keeping the banking system abundantly liquid, the move kept the private sector solvent in the face of a massive global economic slump.
Health and safety
The country has been successful in limiting the health impact of the Covid-19 due to its relatively young population, hugely successful vaccination programme and a range of effective containment measures, which have mitigated the spread of the virus and the number of deaths.
While supporting the economy and the livelihoods of people amid the crisis, the authorities never lost their focus on public health and safety. Undoubtedly, the gradual reopening of the economy in the second half of 2021 paved the way for a steady and stronger GDP growth outlook in the current year.
