IMF upgrades UAE's economic growth forecast to 3.1 per cent

The International Monetary Fund (IMF) on Tuesday revised upward the UAE’s economic growth forecast for 2021 in line with the increase in its projection for the regional and global economies.

IMF upgraded the UAE’s growth forecast to 3.1 per cent for 2021 in its latest World Economic Outlook released on Tuesday, as compared to 1.3 per cent in October 2020.

But the IMF sees growth softening to 2.6 per cent next year.

The IMF credited the approval of multiple Covid-19 vaccines that can reduce the severity and frequency of raging viral infections for an improved outlook of the domestic and global economy.

The UAE is the second most vaccinated country in the world after Israel.

According to the Ministry of Health and Prevention (MoHAP), 8.5 million doses of various Covid-19 vaccines have been administered to UAE residents till Sunday (April 4).

Data showed that the rate of doses per 100 people rose to 86.7.

The IMF reported better performance of the UAE economy in 2020, when the pandemic had struck.

From its October 2020 forecast of 6.6 per cent contraction, the IMF reported 5.9 per cent contraction in the UAE economy in its April 2021 World Economic Outlook report.

For the oil-exporting countries in the region, it hiked 2021’s growth forecast from 3.3 per cent to 4.6 per cent for 2021. For 2022, the IMF sees slower growth of 3.4 per cent.

“On average, countries that started vaccinations early on – for example, Gulf Cooperation Council (GCC) countries – face relatively better prospects, while fragile and conflict-affected states, which may have to rely on the more limited supply provided by Covax, have seen their outlook darken since the October 2020 World Economic Outlook,” IMF said in its latest note.

For the Middle East and Central Asia regions, projections for 2021 reflect significant differences among countries, depending on the path of the pandemic, vaccine rollouts, tourism dependence, oil price developments, and policy space and actions.

For the Middle East and Central Asia region, IMF revised the upward growth outlook to 3.7 per cent for 2021 from 3 per cent. For the Middle East and North Africa region, the IMF revised the 2021 growth outlook from 3.2 per cent to 4 per cent.

-waheedabbas@khaleejtimes.com