"Central": 28% increase in government spending during 2020

4.1 billion dirhams of financing for small and medium-sized companies in 3 months

Increase small business lending by 3.2% by the end of the first half of 2020. Photo: Ashok Verma

The Central Bank stated that it expanded the definition of small, medium and micro enterprises, so that a larger segment of them would be eligible for financing, which raised the lending of this sector by 3.2% by the end of the first half of this year, compared to the same period last year, explaining that the number of The companies that benefited from the zero-cost financing facility provided by the Central Bank to banks in mid-March reached 9527 companies by July, with a value of 4.1 billion dirhams, while the number of current accounts for small, medium and micro enterprises with banks increased by 3.9% to reach 124.9 thousand account.

Government spending

The Central Bank expected that government spending will witness an increase of 28% during the current year, in line with the expected financial stimulus, due to the uncertainty prevailing in global economies due to the continuing repercussions of the Corona pandemic.

The Central Bank stated in the quarterly review report for the first half of this year, issued yesterday, that real estate prices are expected to begin to moderate in the last quarter of the year, and employment is expected to witness further recovery and improvement by the end of the second half of 2020.

Supportive measures

He indicated that the recovery of economic sentiment will depend on the size of the supportive measures at the policy level, while the enhanced targeted economic support program adopted by the Central Bank, and the economic stimulus packages announced by both local and federal governments, are likely to boost non-hydrocarbon activities, real estate prices, employment and credit growth, With a positive effect on the general feeling once the risks of the virus are under control.

The "central" added that oil prices are expected to recover further in view of the decrease in supply and the increase in global demand, which is expected to return to normal levels by the end of this year.

Exchange rate and transfers

The quarterly review report for the first half of this year, issued by the Central Bank, pointed out that the dirham exchange rate rose during the second quarter of the year by 0.8% on a quarterly basis and 1.7% on an annual basis, which is mainly due to the increase in the value of the dirham. The dollar against the currencies of the UAE's top 10 import partners from countries that are not linked to the dollar.

The report stated that during the second quarter of this year, personal transfers directed abroad decreased by 10.3%, to reach 38.2 billion dirhams, compared to 42.6 billion dirhams during the same period in 2019.

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