UAE's economy expected to grow 4.1% in 2022 – Fitch

UAE's economy expected to grow 4.1% in 2022 – Fitch

The UAE's economy is expected to witness a strong recovery in 2021 and grow 4.1%, revised from 3.9%, in 2022 following a 6.1% contraction in 2020, according to Fitch Solutions. The anticipated economic growth in the UAE reflects higher oil output under the new OPEC+ deal, a sustained recovery in the tourism sector, and strong domestic consumption, Fitch referred in its recent report. Fitch's growth forecasts for 2021 and 2022 are above the UAE's average growth rate of 3% in the five years prior to the coronavirus (COVID-19) pandemic and show that the country will resume its pre-crisis size in 2022. The global rating agency predicted that net exports would lead the UAE’s post-COVID-19 economic recovery in 2021 and 2022 and contribute 1.6 percentage points (pp) to real GDP growth this year and 1.9 pp in 2020. The rebound in net exports is driven by a recovery in hydrocarbon and non-hydrocarbon production and a moderate revival of tourism activity. Meanwhile, private consumption is forecast to contribute 1.2 pp to real GDP growth in 2021 and 2022 amid a rapid vaccine rollout with more than 80% of the population having received at least one dose.