The United Arab Emirates anticipates its economy to grow at a rate of 4.2 percent in 2022, thanks to a recovery in oil prices.
According to early figures from the country’s central bank, growth in the oil sector’s gross domestic product is expected to reach 5% this year, up from a 2% contraction last year. Non-oil GDP is predicted to hold steady in 2021.
A quarterly economic review noted that “economy predictions are exposed to uncertainty amidst Covid-19 ramifications.”
In 2020, Gulf countries, including the UAE, were struck a double blow when the coronavirus epidemic was coupled with a collapse in crude prices, the region’s major source of revenue. Last year, morale improved as travel restrictions were loosened and Dubai’s Expo 2020, which attracted millions of people, was announced.
Looking at the GCC more closely, the World Bank predicted in December that the six-member group will grow at a rate of 2.6 percent this year.
Bahrain is expected to grow at a rate of 3.5 percent, followed by Qatar and Oman at 3%, the UAE at 2.7 percent, Saudi Arabia at 2.4 percent, and Kuwait at 2.4 percent (2 percent).
The rise in oil prices was a major element in this expansion.
Oil prices soared to yearly highs of more than $85 in October after starting 2021 at just over $50 a barrel. However, when the Omicron variant lowered fuel consumption, prices fell again at the end of the year, eventually finishing out 2021 at roughly $77 a barrel.
Nonetheless, the earlier surge benefited Gulf countries economically for much of the year.
While higher oil prices boosted revenue across the region, a number of countries sought to implement or prolong long-term fiscal consolidation plans. A number of Gulf countries have also implemented creative changes aimed at boosting competitiveness and attracting foreign investment.
While soliciting foreign investment remains a top priority for all Gulf countries, others, such as Qatar, have prioritized building self-sufficiency in specific areas. Qatar has created major industrial recycling facilities domestically, in addition to initiatives to improve food security by investing in high-tech agriculture solutions.
The number of daily viral cases in the UAE has risen to more than 2,000 in recent days, up from less than 100 instances less than a month ago.
The UAE’s economy is expected to increase by more than 3% this year and remain stable until at least 2026, according to the International Monetary Fund.
The UAE economy, particularly in Abu Dhabi, is primarily reliant on petroleum and natural gas income. Oil exports accounted for more than 85% of the UAE’s economy in 2009. Oil sales accounted for 77% of the UAE’s governmental budget in 2011. Economic diversification has occurred in recent years, particularly in Dubai. In terms of diversification, Abu Dhabi and other UAE emirates have taken a cautious approach. Dubai’s oil reserves are significantly lower than those of its neighbors.
Tourism is one of the UAE’s most important non-oil revenue sources. The UAE’s economy is diversifying thanks to a large construction boom, an expanded manufacturing base, and a strong services sector. There are now $350 billion worth of ongoing construction projects across the country.
The UAE is a member of both the World Trade Organization and the Organization of Petroleum Exporting Countries (OPEC).