The United Arab Emirates’ economy will grow 2.1% this year and 4.2% in 2022, the central bank said on Wednesday, as the Gulf state rebounds from the coronavirus downturn.
“Economic activity in the UAE continued its recovery in the second quarter, with growth reaching almost pre-COVID-19 levels,” the central bank said in its quarterly economic review.
It forecast real non-hydrocarbon growth – adjusted for inflation and excluding the oil sector – of 3.8% this year and 3.9% next year, though it cautioned that projections were susceptible to lingering uncertainties amid the pandemic.
The UAE economy benefited from a recovery in global travel and a pick up in domestic and external demand in the second quarter, the central bank said. It has also had a successful vaccination drive.
The real estate market – a vital economic sector in the country – has improved. Prices in Abu Dhabi registered year-on-year gains for the second quarter running, the first time it has done so in more than five years. Prices in Dubai were still declining in the second quarter, although at a slower pace, said the central bank.
Dubai said separately on Wednesday that it expects economic growth of 3.1% this year and 3.4% next year.
The emirate has seen a rebound in tourism and hospitality, with hotel occupancy increasing to 62% in the first half of the year, up from 54% during 2020 as a whole, said the central bank.
The Middle East tourism hub expects to receive a further boost from the Expo world fair, which starts on Oct. 1, though economists have said ongoing global travel restrictions may limit the event’s economic upside.