Abu Dhabi, 22 February 2022 (TDI): The International Monetary Fund (IMF) projects continued economic improvement in the United Arab Emirates after the country showed a great rebound amidst the ongoing effects of the COVID-19 Pandemic.
This rebound is in large part, thanks to the vaccination efforts by the government with over 95% of the total population now fully vaccinated and approximately 47% having received a booster dose, the government has also been fast to act on other COVID related issues.
The IMF predicts a real GDP growth rate of 3.5% in 2022 which is up 1.2% from the growth rate in 2021, which stood at 2.2%. Furthermore, the non-oil sector in the country is projected to grow by 3.4% this year.
Rising oil production and increasing foreign investment along with the government’s continued support towards sectors that have been hit hard by the pandemic have also helped the economy to rebound.
388 billion Dirham worth of stimulus packages have been disseminated to the economy with another 50 billion going towards the banking sector to increase liquidity.
“The economic recovery is gaining momentum, supported by the UAE’s early and strong health response, continued supportive macroeconomic policies, and rebound in tourism and domestic activity related to the delayed Expo 2020.
Overall GDP growth is projected at 2.2 percent in 2021, driven by non-oil growth of 3.2 percent. Real oil GDP growth is expected to be close to zero this year in line with the OPEC+ agreement.”
The Fund predicts that the fiscal deficit will reduce to just 0.7% of the GDP in 2021. Higher oil prices are set to benefit the United Arab Emirate’s current account balance which will bring it back to pre-pandemic levels.
The current account will reach 8.5% of the GDP in the medium term. Although inflation continues to be a big problem with a sizeable gain year-over-year from 0.6% in 2021 to 2.2% in 2022.