The UAE Central Bank expected the country’s gross domestic product to grow at a rate of 4.2% this year, with a growth of 3.9% for non-oil output. In the quarterly review of the third quarter, the Central Bank expected that the GDP growth for the year 2021 would reach 2.1%, and it is likely that the growth of non-oil output will be at 3.8%.
He said that economic activity in the UAE continued to recover in the third quarter of last year, as a result of an improvement in local and global demand, at a time when the country continued its leadership in containing the spread of the Corona virus, and maintained its leadership globally since the beginning of the pandemic in terms of the number of tests that were carried out. Conduct and distribute vaccines to each individual.
He stressed that the residential real estate market continued to improve, as prices in Abu Dhabi recorded gains on an annual basis in the third quarter, while they decreased in Dubai at slight rates.
He said that employment and the salary rate remained stable in the third quarter, while it was higher compared to the last month before the crisis (February 2020), according to the data of the wage protection system of the Emirates Central Bank. Also, data on tourism and hospitality in Dubai during the first nine months of 2021 showed a recovery in hotel occupancy to reach 62%, up from 51% recorded during 2020.
Banks continue to acquire a wider segment of personal remittances, with a growth of 29.9%
The Central Bank maintained its forecast for the UAE’s oil GDP growth rate of 5% in 2022 after a 2% contraction expected in 2021. The Central Bank said that the inflation rate in the UAE turned positive in the third quarter for the first time since the fourth quarter of 2018 by 0.6 %, as inflation in the prices of tradable and non-tradable goods remained at 1.5% and 0.1%, respectively. He said that inflation is expected to remain almost constant during 2021. He pointed out that residential real estate sales prices in Abu Dhabi rose on an annual basis for the third consecutive quarter after five years of continuous decline, while they fell in Dubai at a slower pace.
The Central Bank pointed out that the nominal effective exchange rate of the dirham decreased by 4% on an annual basis in the third quarter of 2021 due to lower inflation, compared to the main trading partners and in line with the development of the exchange rate of the US dollar.
Transfers
The Central Bank confirmed that personal transfers abroad increased by 9.2%, or the equivalent of 3.7 billion dirhams on an annual basis in the third quarter of 2021 to reach 43.8 billion dirhams, compared to 40.1 billion dirhams in the third quarter of 2020, and remittances abroad through banks increased by an amount 5 billion dirhams, a growth of 29.2% to reach 17.2 billion dirhams, compared to 12.2 billion dirhams in the third quarter 2020, and about 8.6 billion dirhams in the third quarter 2019, while transfers through exchange companies decreased by 1.3 billion dirhams, or 5.1%, to 26.6 billion dirhams, compared to 27.9 billion dirhams dirhams in the third quarter of 2020, and 34 billion dirhams in the third quarter of 2019.
The five countries in terms of personal remittances abroad during the third quarter of last year were India, Pakistan, the United States, the United Kingdom and the Philippines, equivalent to a share of 26% and 12.3%, respectively for the first two countries, while the percentage for the last three countries was 6.6% for each of them The grand total of transfers.
The cost of credit risk insurance continues to decline and Abu Dhabi is the lowest in the region
The data of the quarterly review of the Central Bank for the third quarter of 2021 showed that credit risk swaps, or the cost of insurance against non-payment risks, decreased in general in the third quarter of last year, compared to their levels in 2020, as a result of improving economic conditions. The premiums for credit default swaps for the Emirate of Abu Dhabi decreased by 1 basis point to reach 41.9 basis points, compared to 42.9 basis points in the second quarter, and 44.7 basis points in the first quarter of last year, to keep the premiums for credit default swaps for the Emirate of Abu Dhabi the lowest in the Middle East Middle and Africa.
The premiums for credit default swaps for the Emirate of Dubai decreased by 3.1 basis points to reach 90.4 basis points, compared to 93.5 basis points in the second quarter and 107.8 basis points in the first quarter of 2021.
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