The IMF in its World Economic Outlook report issued in April had forecasted a 3.5 percent contraction for 2020 and a 3.3 percent growth in 2021 for the UAE.

Khatija Haque, chief economist at Emirates NBD Research, predicts that the Gulf economy’s GDP growth to rebound in 2021, given the pandemic is contained and a vaccine is available in the first half of 2021.

Khatija Haque told the media, “However, most governments in the region are likely to prioritise deficit reduction over growth, which could weigh on a recovery even as the external environment improves.”

The central bank of UAE last month forecasted that the country’s gross domestic product (GDP) will contract by 5.2 percent this year as a result of the pandemic. The UAE’s GDP contracted by 7.8 percent during the second quarter compared to a contraction of 0.8 percent during the first three months of 2020.

In the Quarterly Economic Review for 2020, the central banks said, “As a regional trade, tourism and transportation hub, the UAE economy was hit by the general ban on travel, while manufacturing production shrunk due to supply chain disruptions, limited export opportunities and subdued domestic demand.”

For the greater Middle East and North Africa (MENA) region, the IMF projected a 5 percent contraction in 2020 and a 3.2 percent growth in 2021.

The post UAE’s revised economic outlook to contract by 6.6% in 2020: IMF appeared first on International Finance.

UAE’s GDP contracted by 7.8 percent during the second quarter compared to a contraction of 0.8 percent during the first three months of 2020.

In its Quarterly Economic Review for the second quarter, 2020, the central banks said, “As a regional trade, tourism and transportation hub, the UAE economy was hit by the general ban on travel, while manufacturing production shrunk due to supply chain disruptions, limited export opportunities and subdued domestic demand.”

The central bank also said that non-oil GDP shrank an estimated 9.3 percent in the second quarter, compared with a 2.7 percent drop in the previous quarter. However the central bank expects the non-oil GDP to contract by 4.5 percent for the whole year.

The report also said, “Being an oil exporting and open economy, the UAE is likely to feel the fallback from reduced global demand for oil as well non-oil exports, while tourism and related services, particularly hospitality and retail trade were severely affected. In addition, Foreign Direct Investment (FDI) is assumed to fall due to the deterioration in investors’ sentiments.”

The UAE federal government recorded a budget surplus of around Dh9.75 billion in the second quarter, up from a surplus of Dh1.8 billion in the first quarter 2020. Revenues in the second quarter were at Dh34.744 billion and expenditures were at Dh24.997 billion, local media reports said.

The post UAE GDP to contract by 5.2% in 2020: Central bank appeared first on International Finance.

According to the apex bank, the improved growth outlook for 2019 is based on rising public and private spending at the federal and emirate levels. Greater investments in light of Dubai Expo 2020 and continued regional economic recovery will also contribute to UAE’s economic growth.

UAE’s economy is projected to grow by 2.3 percent in 2019. The economy had a growth rate of 1.7 percent in the previous year.

The economy is also expected to continue growing in 2020 as well, according to the latest forecast by the International Monetary Fund (IMF) and the Institute of International Finance (IIF).

The International Monetary Fund, after a discussion with the UAE’s government, revealed that the Emirates’ economy will grow by 3 percent in 2020. The growth rate is only expected to increase as the year progresses.

Garbis Iradian, chief economist at the Institute of International Finance, Middle East and North African region, told the media, “We expect non-hydrocarbon real GDP growth to pick up to 1.7 percent in 2019 and 2.2 percent in 2020, supported by Abu Dhabi’s three-year stimulus package and Dubai’s spending linked to Expo 2020.

According to the forecast, Abu Dhabi’s GDP would grow by 2.3 percent in 2019 and by 2 percent in 2020. Similarly, Dubai’s economy is expected to record 2.1 percent and 2.3 percent growth respectively.

However, according to reports, growth in the UAE’s non-oil private sector slowed to a 10-year low in November. It was the UAE’s weakest growth rate since August 2009.

The post UAE to see higher growth due to greater spending appeared first on International Finance.