SS: The expansion and growth of the non-oil sector played a decisive role in the economic recovery
5% expected growth of the UAE economy in 2022
The UAE achieved 3.8% economic growth in 2021. Reuters
Chief Investment Officer for Emerging Global Markets at UBS.
The Swiss Wealth Management Company, Michael Bolliger, expects that the economic growth rates in the UAE will exceed 5% in 2022.
"The UAE's gross domestic product (GDP) growth rate is likely to exceed 5% by the end of this year, with the growth momentum accelerating significantly since the beginning of the year," Boliger said.
He added that "the UAE achieved an economic growth of 3.8% in 2021, with the support of government stimulus plans and the vaccination of all qualified residents of the country, so that the UAE became one of the first countries in the world to vaccinate against (Covid-19)," noting that the expansion and growth of the sector Non-oil also played a crucial role in the economic recovery.
He explained that all leading indicators such as the Purchasing Managers' Index and business confidence indicators indicate that the growth of the non-oil sector is still strong, after a good start this year, as the country's gross domestic product grew by 8.2% during the first quarter of this year, while Oil GDP increased by 13%, in line with the "OPEC Plus" agreements.
He pointed out that the high levels of real income in the UAE, as a result of wage increases and higher employment rates, contributed to supporting domestic demand, and then the rapid recovery of the wholesale and retail trade and real estate sector.
Boliger stated that the transport, tourism and hospitality sectors achieved a strong recovery during the last period, with the increase in the number of visitors and the increase in hotel occupancy rates, as the more flexible epidemic measures after the successful vaccination campaign played a major role in the recovery of these sectors.
Chief Investment Officer for Emerging Global Markets at U.S. Bank.
S., pointed out that "Expo Dubai 2020, which attracted more than 24 million visitors, was a major contributor to the recovery of the tourism sector in the country, as well as the revival of local activity at the beginning of this year."
He pointed out that the rapid recovery of the national economy, from the repercussions of the "Covid-19" pandemic, in addition to the large and main contributions from the non-oil sectors, clearly show the level of economic diversification in the UAE, and the relative importance of non-oil economic activities, which is consistent with the state's economic policies in Reducing dependence on oil, and consolidating the economy based on knowledge and innovation.
Boliger said, "The strategic goals of the UAE regarding the transition to a low-carbon economy and limiting climate change are very important and encouraging, as the country has set a goal to reach (zero carbon emissions) by 2050, by expanding the share of renewable energy sources in the energy mix. investments in sustainable desalination technologies, and overall emission reductions.”
Boliger predicted that the economies of the Gulf Cooperation Council countries will grow by 6.4% this year, and 3.4% in 2023, expecting that the growth rates of the non-oil sector will remain strong despite the rise in interest rates.
The International Monetary Fund had expected the economic growth of the Gulf Cooperation Council countries to accelerate to 6.4% in 2022, after its previous forecasts, which indicated a growth of only 2.7%.
Puliger pointed out that pegging the exchange rate in the Gulf Cooperation Council countries to the US dollar serves the Gulf economies well, as well as being an important and necessary factor to reduce inflation rates, as local currencies rise with the strength of the dollar, which limits price pressures caused by goods and services. Therefore, inflation rates are still relatively moderate.
“The global economy is heading in a downtrend as recession fears rise, as the US GDP contracted during the second quarter by 0.9 percent year-on-year, and recorded the second consecutive quarterly decline.
While in Europe a recession has become likely due to the ongoing disruptions in energy supplies.
The International Monetary Fund reduced its forecast for global economic growth last July to 3.2% in 2022, from a forecast of 3.6%, issued last April, while lowering its forecast for growth in 2023, to 2.9% from its previous estimates of 3.6%.
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