The UAE has been quick to address the health and economic impacts of the COVID-19 pandemic. Extensive early screening and containment measures helped limit the spread of the virus.
Vaccination rates are among the highest in the world, as a result of early vaccination efforts.
During 2021, the supportive measures provided by public finance and total financial support contributed to mitigating the effects on the severely affected sectors, small and medium enterprises, those in need, and the financial system. Some supportive measures were also extended.
The International Monetary Fund estimates that the overall fiscal deficit will shrink to (0.7%) of GDP in 2021 and shift to a limited surplus by 2024.
These improvements are due to higher revenues thanks to higher oil prices, strong economic growth, and limited fiscal reform efforts.
The increase in oil prices will benefit the current account balance, which rose by approximately (10%) of GDP in 2021, in line with pre-crisis levels, and will grow within (8.5%) of GDP in the medium term.
The UAE is currently making a lot of efforts to carry out strong reforms under the ambitious Energy Strategy 2050.
The reforms undertaken with the aim of encouraging private sector growth and development also have an important role in promoting non-oil growth, increasing productivity, and attracting foreign investment.
In the next stage, keenness to identify and sequence reform priorities and enhance cooperation at the level of all emirates is an essential requirement to ensure the achievement of higher levels of diversified, sustainable and comprehensive economic growth in the future.
Banks still have an adequate level of money, although asset quality has decreased somewhat and weaknesses in the balance sheet may persist in the coming period, partly due to the COVID-19 crisis.
Growth is expected to accelerate in the medium term thanks to structural reforms, increased foreign investment, and higher oil production.
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