UAE central bank expects economy to grow 4.2% in 2022
The Central Bank of the United Arab Emirates have declared that, it is expecting the UAE economy to grow 4.2% in 2022. This growth is due to strong rebound in oil prices. The non-hydrocarbon real gross domestic product will also grow by 3.9 per cent this year, as per the latest data.
“Non-oil GDP is expected to remain in line with 2021 while economic projections are susceptible to uncertainties amidst Covid-19 repercussions.”- Quarterly Economic Review of the Central Bank of the UAE.
The Central Bank of UAE also said that growth in the oil sector’s GDP will increase by five per cent this year. In the third quarter of 2021, economic activity in the UAE continued its upward trend. In 2021, the total GDP growth hit 2.1 per cent and real non-hydrocarbon GDP increased by 3.8 per cent.
The International Monetary Fund (IMF) is expecting UAE’s economy to grow more than 3 per cent this year. IMF is also expecting the growth will be around the same level till 2026.
Experts think that oil price will remain high on demand in 2022. Though the rising Covid infections can affect the demand of the oil. But higher oil price will certainly benefit UAE economy.
“The business sentiments in UAE looks very positive at the moment and Dubai chamber projections are also positive. This confidence will contribute towards the growth in GDP. However, the key economic drivers, transportation, tourism, real estate and retail remain dependent on how the uncertainty unfolds in 2022.”- Saad Maniar, a senior partner at Crowe.
The central bank expects higher employment and better business sentiment will be the benefits of the economy. Data also shows that UAE economy have seen rapid growth in the non-oil private sector economic activity. Report says that non-oil private sectors are also going to expand this year.
“We are very positive about UAEs economic growth rate in the current year backed by the Expo, growth in the RE, Financial and the tourism segments compared to the previous years. Lots of positive work has been done by the UAE govt in the last 12 months including regulatory changes as well as investments in the economy. The positive affect of all the above should be seen by the economy in the coming years even though the risk from the pandemic still remains.”- Shailesh Dash, a Dubai-based entrepreneur and financier.
Crude prices also edged up during the first trading week of this year. It had gained nearly 60 per cent in 2021. Central bank data also shows that the total bank deposits increased on both yearly and quarterly basis.
“Year-on-year residential real estate sales prices in Abu Dhabi rose for a third consecutive quarter, following five years of decline, while declining in Dubai at a marginal pace. Both, the dirham effective nominal and real rates depreciated year-on-year basis due to lower inflation compared to main trading partners and in line with the US dollar trend.”- The Central Bank of the United Arab Emirates.