The year 2020 may not be wholly remembered for your birthday, maybe not even your wedding, breakup/divorce, and monumental events as they ought to tick; no thanks to the COVID-19 outbreak around the world, which almost put the world to a halt. Well, I'm glad you’re alive to read this.
Nigeria, my country, for instance, had chanted the year 2020 so much before time, that we all looked forward to it even in our subconsciousness, with the weeniest glimpse of hope that liberation would come. Tough one, COVID-19 took the shine.
The UAE in its royalty and splendour, especially when being considered as a big player in the international market was unavoidably impacted negatively, particularly in the sectors of foreign trade, investment, tourism, and logistics.
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Post-Covid, processes are reviewed, businesses are being reconsidered, and the UAE economy may be coming up gradually, likewise the residents.
How COVID-19 impacted the economy of UAE.
Just like the popular quote “No stone was left unturned”, in this context, the UAE was not exempted from the wind of COVID-19 in the year 2020.
According to Data from the Federal Competitiveness and Statistics Centre, the UAE economy shrank by 6.1% from its key sectors like foreign trade, foreign investment, tourism, and logistics in 2020. This was cited upon preliminary data, stating that the coronavirus crisis had a hit on key sectors in the country.
How COVID-19 impacted the economy of Dubai.
Although Dubai has long been celebrated for its diversification scheme compared to co-Emirate like Abu Dhabi which majors on its oil reserves to generate revenue. Dubai’s cash cow like tourism, hospitality, and travel experienced a downward slide in the early quarters of 2020.
The arts, entertainment, and leisure sectors were the hardest hit in Dubai in 2020, with a -55 per cent drop, transportation and storage a -35 per cent drop, and accommodation and food service activities a -33 per cent decrease. According to data from the Dubai Statistics Center, this amounted to a 10.9% year-on-year contraction in 2020.
Has the economy of Dubai improved after COVID-19?
Despite the gridlock in trade and investment in the year 2020, Dubai is slowly beginning to experience growth this year. According to data for Q1 of the year, there has been an 11% rise from the previous quarter, although it declined by 3.7% year on year.
There has been a slow growth rate in transportation, hotels, and restaurants compared to 2020 Q1, however, wholesale & retail trade, and financial services have enjoyed growth by 2.8% and 3.5% year-on-year.
From all indicators, the city of Dubai is slowly getting back its momentum as the city it is known for. The start of the Dubai Expo on the 1st of October 2021 would ripple to the stance of the economy, and that of the UAE as a whole. The Dubai Expo 2020 which was earlier postponed due to the outbreak of COVID-19, would span from October 1st - March 31st, 2022.
What is the medium‑term outlook for trade in the UAE?
Trade in the UAE is gradually commencing; all thanks to the daily decrease in COVID-19 cases. The National Crisis & Emergency Management Authority has therefore relaxed restrictions for some sectors.
The country has slowly and carefully reopened its doors to visitors from all over the world, and tourist visas are now available to applicants from all over the world, provided they are fully vaccinated. Shopping malls, restaurants, and cafes can now operate at 80% capacity, and hotels can reopen at full capacity while adhering to all COVID-19 protocols. Cultural and recreational facilities can also operate at 80 per cent capacity, while weddings and events are limited to 60 per cent and public transportation is limited to 75 per cent.
Finance has seen progress, with Dubai Financial Market (DFM) reporting net profits of AED38.8 million in the first half of 2021. This same energy was evident in Abu Dhabi's quarterly average Financial Market Index, which increased by 17% in Q1. The average market capitalization of companies listed on the Abu Dhabi Securities Exchange increased by AED101 billion, demonstrating the UAE economy's upward trend.
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