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UAE economy poised for recovery in 2021: How will this affect residents and their spending?

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The United Arab Emirates has an open and dynamic economy which, in the space of a few decades, has been able to transform itself into one of the most developed realities in the Middle East.

Like the other countries in the region, the UAE was hit hard by the Covid-19 pandemic, which caused a double shock on the economy:

  1. On the one hand, the collapse in demand and prices for crude oil that has put pressure on the industry, from here on you have cuts in OPEC production.
  2. On the other hand, some of the most significant elements of the trade, air transport, real estate and tourism sectors (all heavily dependent on the mobility of people)
  3. Finally the third factor, the EXPO, (which will start in October 2021)

According to the study by several scientists, the UAE’s economy is expected to recover strongly again in 2021 until 2024, reaching a growth rate of (GDP) of 4.1% in 2021, after a contraction of the 5% in 2020.

The continuous stimulus of the government here has as its objective the unblocking of the economy through EXPO 2021, has recently received a “Safe Travel Certification” from the Word Travel and Tourism Council, with the aim of achieving a standardization of six sectors ( Aviation / Tourism / Retail) and return to its pre-COVID levels.

The central bank of the UAE has so far implemented stimulus measures for around 18% of GDP. Of the 100 billion Dh of monetary stimulus announced so far, most of the funds have been earmarked for SMEs and consumers.

But it also explains what are the strategies that could help in GDP recovery:

a) Simplify the rules for the participation of foreign investors in local businesses;
b) further loosen the residence rules;
c) encourage faster private sector growth.

The role of oil in the economic recovery

As we know, oil is the main source of government revenue in the UAE, Oil exports represent about 25% of the UAE’s total exports, and the goal of stabilizing the economy and generating a price recovery. of it.

To view the complete article, visit the website:  Khaleej

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