UAE economy to rebound in 2021, grow 3.3%: IMF
In the region, Iran will be the worst hit country, contracting 6.0 per cent in 2020 following 7.6 per cent in 2019.
The UAE and the neighboring Gulf economies will rebound strongly next year as the Covid-19 coronavirus situation is expected to normalise, according to International Monetary Fund's World Economic Outlook released on Tuesday.
The UAE economy will see a 3.3 per cent growth in 2021, the IMF said, while predicting a 3.5 per cent contraction this year. The decline in the UAE and regional countries is in line with contraction of the global economy and other major economies.
In the region, Iran will be the worst hit country, contracting 6.0 per cent in 2020 following 7.6 per cent in 2019. Saudi Arabia, the region's largest economy, will shrink 3.9 per cent, Qatar by 4.3 per cent, Kuwait by 1.1 per cent and Oman by 2.8 per cent. But all the economies will rebound strongly as world economy will pick pace, resulting in higher oil prices and increase in growth of non-oil sectors.
Nirav Shah, director of Fame Advisory DMCC, said as dust settles down next year, public and private sectors will resume full throttle, therefore, economies will definitely take off.
"Even if we don't get where we were prior to Covid-19, but there will be a better change. Plus, Expo 2020 will give a further boost to the economy."
Even in these tumultuous times, he said, certain sectors such as healthcare pharmaceutical, medical equipment sector and food sectors are still in great demand.
"These sectors will continue to lead even in coming years. I do expect e-commerce, delivery services, telecom and MICE sectors will gain momentum post Covid-19. Other traditional sectors such as logistics, travel, tourism and hospitality will rebound as fears about Covid-19 recede," he said.
"We saw a lot of cancellation of MICE events since March with many of them shifted to November. So entire MICE population that used to come to the UAE, will be visiting the UAE next year. That will help in the reversal of fortune for the economy," he added.
IMF sees oil prices will remain below $45 a barrel through 2023, some 25 per cent lower than the 2019 average price, reflecting persistently weak demand.
IMF also predicted that Middle East and Central Asia region will grow 4.0 per cent in 2021 after shrinking by 2.8 per cent in 2020. While Middle East and North Africa (Mena) will contract 3.3 per cent this year but expand 4.2 per cent in 2021.
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