UAE's economic initiatives to boost overall GDP next year: Central Bank

The Central Bank of the UAE has estimated the country's non-oil GDP to grow by 3.6 per cent by the end of 2021, the Emirates News Agency (WAM) reported on Saturday. The UAE has initiated total economic support packages worth more than Dh388 billion ($105.6B) to support the economy during the pandemic.

The Central Bank of the country introduced the Dhs100B Targeted Economic Support Scheme (TESS) in March 2020 to stimulate and lift financial flexibility in the fiscal and banking sectors the local economy during the pandemic. TESS programme includes zero-interest, Dhs 50B collateral funding for local banks and a supplementary Dhs50B to lower banks' capital buffers, and was extended to June 30 next year.

The International Monetary Fund (IMF) expects nominal output in the UAE to grow by 3 per cent, and the real total GDP growth to be 1.3 per cent in 2021. The current account balance is likely to reach 7.5 per cent next year compared to 3.6 per cent this year, stressing that the UAE's financial reserves are abundant.

The IMF in its latest report entitled "Economic Prospects and Policy Challenges for the GCC" estimates that the announced plans for fiscal adjustment in the coming years in the UAE will go a long way after few mid-term financial contractions. The government has taken measures to mitigate job losses while encouraging employers and employees to work remotely.

The UAE's major initiatives include amendments to the commercial transactions and bankruptcy laws, amendments to the Commercial Companies Law (CCL) and the provision of endowments and incentives to tourism establishments. Other initiatives to promote foreign direct investment (FDI) were amendments to the commercial transactions law and the decriminalization of bounced cheques, a decrease of fees and taxes on the tourism sector.

"The UAE has made new and important strides in supporting the national economy and accelerating the pace of recovery of various vital sectors from the impact of the Covid-19 pandemic," stated Abdulla Bin Touq Al Marri, the Minister of Economy on Saturday.