The COVID-19 pandemic has brought the world to a standstill, and even after a year, the economy is still struggling to rejuvenate and prosper. Governments around the world are seeking to adapt to the “new normal” and have been taking measures to revive the economy. According to estimates by the International Monetary Fund, the UAE’s economy has also been hit hard by the pandemic and is expected to shrink by about 6%. Key industries such as tourism, real estate, transportation, and trade have been greatly affected. In addition, lower oil prices are putting pressure on the country’s finances, and the government’s deficit is expected to account for about 9% of GDP.
In May 2020, the UAE announced for the first time how it plans to recover in the post-COVID world by announcing a two-phase recovery strategy. In the first phase, with the support of private sector incentives, the economy will reopen. The next phase will be characterized by a long-term stimulus strategy to accelerate recovery and promote investment in the digital economy, including 5G networks and artificial intelligence. Digital asset investor You can stand to benefit from such a move. In addition to the digital economy, the “green economy” is a priority area in the post-epidemic era, and will support industries such as electric vehicles, renewable energy, and circular economy. Another area of focus will be to achieve food security through the use of advances in artificial intelligence, biotechnology, and genetic engineering.
The UAE has also adopted a loose monetary policy to revitalize the economy. The central bank lowered the policy interest rate by 125 basis points in 2020 and halved the bank reserve ratio from 14% to 7%. This will ensure a continuous supply of credit and maintain economic development. The UAE Central Bank has also launched a new securities issuance program for financial institutions, called M-bill (currency bills), which will be traded through Bloomberg’s primary and secondary market solutions.
The country’s strong export qualifications will cushion the severe financial situation and the impact of the pandemic.according to investment group, The UAE’s friendly business environment, excellent infrastructure, relatively diversified economic and political stability support the inflow of foreign direct investment. The UAE remains the main destination for foreign direct investment inflows in the region, which will have a positive impact on economic recovery.
In the past few months, the country has also been carrying out in-depth economic reforms that can change the economic base, which will have a positive impact on future growth. The authorities have set clear goals to achieve a competitive knowledge-driven economy with a focus on emerging technologies. The UAE has been committed to redesigning and transforming its economy to strengthen the economic structure, emphasizing business, investment and technology. The government will focus on adaptation and faster recovery, with emphasis on sustainable growth. All these efforts will promote productivity growth and promote the supply of high-quality skilled labor for rapid economic growth.
Due to the occasional rise in cases, the UAE has successfully controlled the spread of the virus. The substantial resources for rapid testing and broad-based vaccination programs are expected to yield great results. In the second half of 2020, companies will resume work and production, travel restrictions will be slowly lifted, and international borders will be opened again. Investment Opportunities rose. The economy has begun to recover quietly. Now, the country must focus on sustaining these efforts harmoniously and productively, taking into account possible pandemics in the future.
The setback of COVID-19 should be seen as a catalyst to rebuild the economy in a sustainable, resilient and adaptable way.