January 18, 2023
A prominent IMF official claims that the UAE economy has recovered fast from the effects of the COVID-19, with strong near-term economic growth supported by a rebound in domestic activity and significant surpluses in the fiscal and external balances.
“Economic growth has been strong this year, driven by increased oil output in accordance with the OPEC+ production agreements, as well as a solid recovery in the tourism, construction, and activity related to the Dubai World Expo. According to Jihad Azour, Director of the International Monetary Fund’s Middle East and Central Asia Department, who spoke to the Emirates News Agency, “the economic recovery is gathering momentum spurred by the restoration of the economic cycle” (WAM).
The UAE GDP growth is anticipated to increase from 3.8 percent in 2021 to above 6 percent in 2022, according to the most recent IMF review. With rising worldwide trends, inflation has increased and is predicted to average just over 5% this year. Gaining from increasing oil prices as well as the removal of the temporary fiscal assistance provided to businesses and individuals during the COVID crisis as the pandemic gradually subsided, fiscal and external surpluses have expanded even more. Greater financial inflows as a result of increased global unpredictability helped some real estate markets experience quick price growth.
He further stated that domestic activity continues to underpin the UAE’s economic outlook, which is encouraging. “With the implementation of continuing reforms, we anticipate non-hydrocarbon growth to be approximately 4% in 2023 and to pick up speed over the next few years. According to projections, inflationary pressures will eventually lessen as a result of tightening financial circumstances. Growth will also be supported by the continued development of domestic capital markets, especially through the federal government’s issuing of local currency debt.”
Azour stated that the Middle East and Central Asia’s economies have been robust thus far, and that a multispeed recovery will continue in 2022; and “This year, the Mena area is expected to develop by 5%, up from 4.1% in 2021. The projection for next year will be hampered by the worsening of the global economic climate, as growth will stall at 3.6 percent. The oil exporters’ growth is expected to be 5.2 percent this year, with high oil prices and strong non-oil GDP growth acting as the world’s headwinds.”
Source: Khaleej Times
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