UAE’s non-oil GDP to grow 3.6% by end 2021

The UAE’s non-oil GDP is expected to grow by 3.6 per cent by the end of 2021, the Central Bank of the UAE (CBUAE) has estimated.

In the wake of the Covid-19 pandemic, the total value of economic support in the form of packages and incentives has crossed Dhs388bn, contributing to business continuity, commercial activities and the ability to grow in vital sectors, official news agency WAM reported.

“The UAE has made new and important strides in supporting the national economy and accelerating the pace of recovery of various vital sectors from the impact of the Covid-19 pandemic,” noted Abdulla Bin Touq Al Marri, Minister of Economy.

“The total value of economic support packages and initiatives provided by the federal and local governments since the onset of the pandemic has reached more than Dhs388bn. These measures have contributed to business continuity, increased momentum of commercial activities, and have strengthened their ability to grow and compete in various vital sectors.

Bin Touq added: “We are continuing our efforts to complete the implementation of initiatives of the recovery plan according to the approved schedule. The overall completion rate of the initiatives under the first phase is estimated today at more than 46 per cent. Our efforts will continue with the concerned partners during the coming period to complete the implementation according to the timeframe specified for each stage. ”

Major initiatives have been implemented to date, including amendments to the bankruptcy law, allocation of grants and incentives to tourism establishments, promotion of foreign direct investment (FDI) through amendments to the commercial companies law, amendments to the commercial transactions law and the decriminalisation of cheques without balance, reduction of fees and taxes on the tourism sector, enhancing flexibility of labour market and the Targeted Economic Support Scheme (TESS).

The Dhs100bn TESS initiative was launched by the CBUAE in March 2020 to support the UAE’s economy during the Covid-19 pandemic, which consisted of zero-interest, collateralised loans worth Dhs50bn for local banks and an additional Dhs50bn freed up from banks’ capital buffers.

Read: UAE Central Bank announces Dhs100bn package to counter Covid-19

Saif Hadef Al-Shamsi, deputy governor at Central Bank of UAE, said: “We have successfully implemented the Central Bank’s comprehensive targeted economic support plan that helped the financial sector manage its liquidity and supported individual customers and companies affected by the repercussions of the Covid-19 pandemic.”

More than 310,000 individual clients, nearly 10,000 small and medium enterprises, and more than 1,500 private sector companies have benefited from the loan deferral programme included in the support plan. The domestic credit growth during the year until the end of October grew by 2.6 per cent.

Key components of the TESS programme were extended until June 30, 2021, the Central Bank announced last month.

Read: UAE Central Bank extends Targeted Economic Support Scheme until June 2021

“The Central Bank maintains its role in following up the measures taken by extending the implementation period of the main elements of the targeted Comprehensive Economic Support Scheme package for an additional six months until the end of June 2021,” said Al Shamsi.

“From January 1, 2021, banks and financing companies benefiting from the zero-cost central bank facilities will be able to grant new loans and facilities to their clients economically affected by the epidemic.”