UAE's GDP likely to grow by 2.4pc in 2021, says report
ABU DHABI, June 18, 2021
The UAE GDP is expected to grow by 2.4 per cent in 2021 and 3.8 per cent in 2022 while the non-oil GDP will expand by around 4 per cent in both years, according to the Financial Stability Report (FSR) released by the Central Bank of the UAE (CBUAE).
The CBUAE has published its FSR for the year 2020, featuring key solvency and liquidity indicators that demonstrate the resiliency of the UAE’s financial system amid the Covid-19 pandemic.
The report gives a comprehensive overview of the development of the UAE economy and financial system in 2020. CBUAE projects that the UAE economy is expected to gradually recover during 2021 and 2022 from the repercussions of the pandemic.
As per CBUAE’s findings, the Targeted Economic Support Scheme has been effective in mitigating the risks posed by the pandemic by ensuring a continued flow of credit and helping affected individuals and companies by the repercussion of Covid-19 to overcome temporary debt repayment difficulties.
During 2020, the CBUAE closely monitored the developments in the banking sector, especially asset quality and the growth of lending. CBUAE’s Financial Stability Report demonstrates that the UAE banking sector remains resilient, with sustained lending capacity.
The effects of the pandemic resulted in banks’ higher impairment charges, lower operating income and reduced profitability. The aggregate capital and liquidity buffers remain well above the regulatory requirements.
On the findings of the report, CBUAE Governor Khaled Mohamed Balama said: "In line with the UAE’s robust mitigation measures, including a swift rollout of Covid-19 vaccines, CBUAE has worked tirelessly to ensure that vital sectors of the nation’s economy are able to withstand this crisis.''
''CBUAE’s introduction of the Targeted Economic Support Scheme came at the right time, ensuring that banks could mitigate funding and liquidity pressures and maintain their lending capacity, resulting in the provision of necessary aid to individuals and corporates alike," stated Balama.
"Our support is ongoing as most support measures provided by CBUAE will remain in place through 2021. Together with the UAE financial sector, we pave the way for gradual economic recovery and remain vigilant towards the challenges ahead, as we continue to uphold the UAE’s financial and monetary stability," he added.
