The United Arab Emirates expects its non-oil economy to contract 4.1% this year due to the coronavirus pandemic, with a sharper slowdown in the second quarter before a gradual recovery through the rest of the year, the central bank said Wednesday.
Actual performance will depend on government support measures and the successful containment of the virus, it said.
Forecasts for 2020:
- Fiscal growth will average about 28%, corresponding to the projected stimulus to counter Covid-19.
- Credit expansion to slow in the second quarter, followed by a gradual recovery.
- Property prices seen declining with a sharper drop in the second and third quarters, before moderating in the last quarter.
- A drop in employment is expected in the second and third quarters, with a recovery in the fourth.
- Economic sentiment may drop further but is likely to moderate with the projected recovery in the last quarter, reflecting improving sentiment and preparation for the Dubai Expo in 2021.
- Foreign investment is also assumed to fall, from 8% growth between 2017 and 2018, due to deterioration in sentiment.
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