UAE economy to contract by 3.6% this year, central bank says

The United Arab Emirates (UAE) economy is likely to contract by 3.6% this year after economic activity slowed because of the coronavirus pandemic, the central bank said on Wednesday.

“As the drop in economic activity is expected to be followed by sharp contractions in the subsequent quarters, non-energy growth contraction is projected at (minus)-4.1% for 2020,” the central bank said in a first-quarter report.

Hydrocarbon GDP is expected to shrink 2.4% this year, it said.

“While recovery of economic activity is projected to commence in the second half of the year, recovery of economic sentiment will hinge on deploying policy support measures,” it said, referring to stimulus schemes of the central bank and local and federal governments.