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Staying ahead of the curve
The twin shocks of COVID-19 and a plunge in oil prices tossed the world economy into the greatest recession since World War II, but the UAE is weathering the negative trend and analysts expect the country to post significant growth this year
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hough the UAE has a far more diversified economy compared to its Gulf neighbours, oil still contributes significantly to the country’s gross domestic product (GDP). However, any volatility in the global and oil markets can dampen investor confidence and affect the country’s economic performance. The twin shocks of the COVID-19 pandemic and low oil prices tossed the world economy into the greatest recession since World War II, however, the UAE is weathering the negative trend in global markets and analysts remain optimistic about the country’s growth this year.
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Moody’s affirmed its Aa2 issuer rating of the UAE in May, saying the rating is “supported by the relatively muted impact of the pandemic on the federal government’s fiscal strength,” in part due to an effective policy response to the virus. As part of the government’s initiatives to open its economy, the UAE is the most vaccinated nation globally with 75.6% of the population having received first dose of COVID-19 vaccine and 65.8% received two doses of the vaccine, as of July 11, 2021. IHS Markit said that business conditions in the country’s non-oil private sector
Banking and Finance news in the MEA market
continued to improve in June, although at a weaker pace, due to prolonged pandemicrelated curbs and border closures. The UAE’s efforts to diversify the economy away from heavy dependence on oil revenues are opening more investment opportunities in the non-oil private sector and are critical to achieving sustainable growth. “The UAE’s institutions and governance strength has been demonstrated by the spearheading of reforms destined to improve the business environment, and the progress made on diversifying the economy and fiscal revenues away from the hydrocarbons sector,” said Moody’s.
