Economic activity continued its upward trend in the third quarter of 2021

“Central”: 4.2% expected growth of GDP in 2022

The Central Bank confirmed that the main inflation rate turned positive during the third quarter of last year.

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The Central Bank expected the real GDP to grow by 4.2% this year, indicating that economic activity in the UAE continued its upward trend in the third quarter of last year, and the total real GDP growth is expected to reach 2.1% in 2021, and 4.2% this year.

The Central Bank added, in the quarterly review report for the third quarter issued yesterday, that the value of personal transfers abroad during the third quarter of last year amounted to 43.8 billion dirhams, equivalent to a growth of 9.2%, or the equivalent of 3.7 billion dirhams on an annual basis.

Transfers abroad through banks increased by 5 billion dirhams, a growth of 29.2%, while transfers through exchange companies decreased by 1.3 billion dirhams, or 5.1%.

The average effective nominal exchange rate of the dirham, which is the exchange rate that takes into account the bilateral exchange rates of the trading partners of the United Arab Emirates, decreased by 1.5% year-on-year, after a decline of 5.4% in the previous quarter, in line with the trends of the US dollar exchange rate.

The report added that the main inflation rate in the consumer price index turned positive during the third quarter of last year, for the first time since the fourth quarter of 2018. This is due to the rise in energy prices and the significant increase in consumer demand. The inflation rate is expected to remain almost constant in 2021. While the value of the dirham has depreciated in both nominal and real terms on an annual basis.

The residential real estate market also continued to improve, as prices in Abu Dhabi recorded gains on an annual basis, in the third quarter, for more than five consecutive years, while they decreased in Dubai at slight rates.

During the third quarter of 2021, employment and the salary rate remained stable, compared to the second quarter of the same year, but it is higher than the level recorded in February 2020, according to the data of the wage protection system of the Central Bank.

The report indicated that economic activity in the UAE continued its upward trend in the third quarter of last year, as a result of the recovery in local and global demand, while the country continued its leadership in containing the spread of the Corona virus.

The average Purchasing Manager Index in the UAE increased by 6.6% on an annual basis in the third quarter, as it achieved an increase and entered a wider range, as the index reached 53.3 in September, and this improvement reflects the high morale reinforced by the large-scale vaccination program, and the “Expo 2020 Dubai” exhibition. ».

And the “Central” indicated that the expectations of real GDP growth by 2.1% during the past year were based on the performance of the non-hydrocarbon economy, the oil production that the UAE recorded in the first ten months of the year, the statements of “OPEC Plus”, and the expected production schedule.

In its report, the Central indicated that the expectations for the growth of real oil GDP for 2022 did not change, and remained at 5%, which reflects the expected increase in demand, given that the vast majority of the world's economies received vaccines.

Oil production in the United Arab Emirates increased by 9.3% on an annual basis, and 4.3% on a quarterly basis, in line with the “OPEC Plus” agreement.

The real GDP growth forecast for the oil sector was kept at (-2%) in 2021, which is equivalent to an average oil production of 2.72 million barrels per day for the whole year.

hotel occupancy

Data on tourism and hospitality in Dubai in the first nine months of 2021 showed a recovery in hotel occupancy to 62%, up from 51%, which was recorded during 2020, mostly due to the resumption of international travel.

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