The World Bank forecasts that the United Arab Emirates (UAE)’s economy will contract by 4.5 percent this year due to the coronavirus pandemic and the lockdown measures introduced to counter it, the media reported.
The World Bank says UAE’s economy will however pick up next year and will grow at a rate of 1.4 percent. This will be attributed to the growth of the non-oil sector after the restrictions will be eased.
The Global Economic Prospects 2020 report by World Bank projected a 4.2 percent contraction for the wider Middle East and North Africa (MENA) region in 2020 and 2.3 percent growth the year later.
In its report, the World Bank said, “Oil exporters have been adversely impacted by the plunge in oil prices and Covid-19 outbreaks, while oil importers are experiencing spillovers from the weakness in advanced economies and major emerging markets, pandemic mitigation measure-related disruptions, and an expected drop-off in tourism.”
In its reports, the World Bank also predicts that the global economy will shrink by 5.2 percent this year due to the pandemic.
Economic activities in advanced economies are forecasted to contract by 7 percent this year as domestic demand and supply, trade, and finance have been severely disrupted due to the lockdown measures introduced to curb the spread of the Covid-19 virus.
According to the World Bank, the US economy is projected to shrink by 6.1 percent this year, while Euro Area could see a 9.1 percent contraction.
The economic activity in Latin America and the Caribbean, in particular, could plunge by 7.2 percent in 2020. Emerging economies, on the other hand, are expected to contract by 2.5 percent this year.