UAE real GDP to grow faster at 5.4% in 2022, says Central Bank

The UAE’s real GDP grew at 3.8 per cent last year and the growth is expected to accelerate this year to reach 5.4 per cent, the UAE Central Bank said in its annual report.

The apex bank said non-oil GDP growth rose to 5.3 per cent in 2021.

It said like other primary commodity exporters, the GCC states benefitted from higher hydrocarbon revenues in 2021, which further expanded the available fiscal space, thereby supporting the growth momentum. The UAE had the highest growth among the GCC states, followed by Saudi Arabia, Oman, Bahrain, Qatar and Kuwait.

The UAE’s current account surplus increased from Dh77.5 billion in 2020 to Dh176.2 billion in 2021, as a result of the increase in oil and non-oil exports, in addition to a rise in the surplus in the balance of services.

It said the banking system in the UAE continued to enjoy a good level of capitalisation and liquidity.

Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs and Chairman of Central Bank, said these results indicate that the UAE economic recovery is gaining steady momentum, as a result of the early and strong response to the various challenges and their repercussions, the supportive macroeconomic policies.

Despite the numerous economic challenges caused by the Covid-19 pandemic in 2021, he said the UAE was able to excel on the economic front, and even improve its competitiveness, thanks to the overall vision and timely policies enacted by our leadership.

“The resilience characterising the UAE’s banking and insurance sectors played a prominent role in defining a benchmark for dealing effectively with future crises, without compromising the principles of sound risk management. This aligns with international best practice, which has reinforced confidence and credibility in the nation’s financial services sector,” Sheikh Mansour said.

In February, the International Monetary Fund said that the UAE's economic recovery is gaining momentum with the help of the government’s supportive measures by quickly addressing the effects of the Covid-19 pandemic. The Fund projected a faster real GDP growth rate of 3.5 per cent for 2022 as compared to 2.2 per cent for 2021, purely driven by the non-oil sector which will grow at 3.4 per cent this year.

Khaled Mohamed Balama, Governor of the UAE Central Bank, said the local banking system is well capitalised, liquid and has the ability to support the growth agenda of the UAE.

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“Bottom-up stress tests to explore potential banking sector vulnerabilities showed that the UAE’s financial system is resilient and capable of withstanding the various scenarios while maintaining adequate capital and liquidity levels,” Balama said.

The Central Bank Governor takes its anti-money laundering and combating the financing of terrorism (AML/CFT) responsibilities seriously, developing its policies, systems and processes accordingly, he said.

“We have created the required AML/CFT infrastructure, in coordination with the National Committee, to ensure that we provide safe and transparent financial services in the UAE. We will continue to work closely with FATF and other international bodies in the fight against money laundering and terrorist funding,” he said.

-waheedabbas@khaleejtimes.com

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