UAE Central Bank Expects Gradual Recovery in Country’s Economy

UAE Central Bank Expects Gradual Recovery in Country’s Economy

The UAE Central Bank stressed that it will continue to support the banking and financial sector. (WAM)

The UAE GDP is expected to grow by 2.4 percent in 2021 and 3.8 percent in 2022 while the non-oil GDP to expand by around 4 percent in both years, according to the Financial Stability Report (FSR) released by the Central Bank of the UAE (CBUAE) on Thursday.

The CBUAE has published its FSR for the year 2020, featuring key solvency and liquidity indicators that demonstrate the resiliency of the UAE's financial system amid the COVID-19 pandemic.

As per CBUAE's findings, the Targeted Economic Support Scheme has been effective in mitigating the risks posed by the pandemic by ensuring a continued flow of credit and helping affected individuals and companies by the repercussion of COVID-19 to overcome temporary debt repayment difficulties.

In 2020, the CBUAE closely monitored the developments in the banking sector, especially asset quality and the growth of lending.

CBUAE's Financial Stability Report demonstrates that the UAE banking sector remains resilient, with sustained lending capacity.

The effects of the pandemic resulted in banks' higher impairment charges, lower operating income, and reduced profitability. The aggregate capital and liquidity buffers remain well above the regulatory requirements.

In addition, CBUAE conducted