Faster Vaccine Rollout Critical to Economic Rebound

SourceAl Bawaba

Economic activity is estimated to have declined by 6.6% in 2020, reflecting a drop in both non-oil GDP (roughly 70% of total GDP) by -5.1% on COVID-19 fallout and the oil sector by -8.5% due to OPEC+ production cuts. Total GDP contracted in 1H20 by 3.9% y/y as non-oil GDP fell by 6.0%, at a time where movement restrictions and health-related closures were more prevalent, hurting the hospitality, transportation, and wholesale and retail trade sectors (about 30% of GDP). The UAE has done extremely well on vaccinations, standing among the best worldwide performers while avoiding strict closures and curfews. Vaccination deployment, with more than half of the population (52%) covered by mid-March, boosts re-opening and reduces pressures on key sectors. As such, the recovery in 2021 could come from a rebound in the tourism and hospitality sector, although the extent of this recovery hinges on global recovery.

Non-oil GDP is expected to grow 3.3% in 2021 and 3.5%over the more...