UAE economy on tracks towards recovery in 2021

UAE economy on track towards recovery in 2021

Federal Competitiveness & Statistics Centre reveals preliminary results of economic performance in 2020

The UAE economy performed better than expected in 2020 despite the current global challenges brought about by the COVID-19 pandemic, said H.E. Abdulla Bin Touq Al Marri, UAE Minister of Economy, following the issuance of the preliminary results of the country’s economic performance by the Federal Competitiveness and Statistics Centre.

The preliminary results revealed that the country’s macroeconomic indicators had seen a relatively limited decline in the gross domestic product and in the non-oil GDP last year by 6.1 per cent and 6.2 per cent, respectively, at constant (real) prices compared to 2019. This is comparatively low decline considering that the slump in major global economies reached several times lower.

H.E. indicated that the year 2020 was an unprecedented year full of economic and health challenges that negatively impacted major global economies, and the UAE was not immune to the global economic system in this vulnerability. This is particularly so since the country’s economy is linked through foreign trade, foreign investment, tourism and the logistical sector with the movement of trade and investment and global transportation, which declined significantly in 2020 worldwide. However, the government’s proactive economic policies in dealing with the repercussions of the crisis, and the launch of supportive economic packages had a positive role in limiting the negative effects of the pandemic on various vital sectors and on economic activity.

The activation of all economic initiatives related to non-oil sectors and activities contributed positively to enhancing the stability of the country’s non-oil domestic product in the year 2020, as it reached AED 1,005.6 billion at constant prices. Meanwhile, the GDP at constant prices for the year 2020 amounted to AED 1,418.9 billion. Besides, some components of real GDP spending activities (at constant prices for the year 2010) witnessed positive growth in 2020, as government spending achieved an increase of more than AED 1.17 billion over the year 2019. At the same time, investments resulting from capital additions achieved a 3.9 per cent growth, amounting to more than AED 13.1 billion in the year 2019.

In terms of negatively affected economic, accommodation and food services activities witnessed a negative growth of 23.6 per cent, as well as transportation and storage activities by 15.5 per cent. Wholesale and retail trade dropped by 13.1 per cent, while it decreased the activities of construction and building activities by 10.4 per cent.

According to estimates of the Central Bank of the UAE, positive growth rates of the national economy will be restored by the end of 2021. It estimates a 2.5 per cent growth in real GDP, and 3.6 per cent in non-oil real GDP. These figures are expected to rise to 3.5 per cent growth in real GDP, and 3.9 per cent growth in non-oil real GDP in 2022.

H.E explained that MoE, in cooperation with all concerned government entities, is working according to an ambitious vision to double the national economy over the next ten years, to reach AED 3 trillion by 2031.

H.E. Abdulla Bin Touq Al Marri,

UAE Minister of Economy