- It is likely that the non-oil economy will continue to grow and demand levels will rise
- Limited deflation in consumer prices this year as demand improves in the second half
The Central Bank of the Emirates confirmed that the country’s economic activity continued to improve in the first quarter of this year, although it has not yet returned to the previous performance levels before the Covid-19 pandemic. It expected that the UAE economy will grow at a rate of 2.4% this year.
On the other hand, he pointed out that the main inflation level of the consumer price index remained at negative levels in the first quarter of this year, with a deflation of 1.7%, with the continued decline in energy prices and rents, but it showed some improvement compared to a deflation rate of 2.2% in the previous quarter. With a recovery in demand levels.
The Central Bank expects the consumer price index to rise, recording a growth in inflation in the second half of this year. However, it expected that there will be a contraction in the consumer price index by about 0.3% for the current year as a whole.
In the quarterly review report for the first quarter of 2021, the Central Bank said that the non-oil economic sectors continued to improve in the first three months of this year, supported by the relative rise in the global travel and tourism movement, especially that the country was a pioneer in efforts to contain the virus and prevent its spread, as it came in the center. First globally in the number of corona tests, and ranked second globally in terms of distributing vaccinations to the population, with 37.6 million examinations conducted and 8.3 million doses of vaccine distributed, which represents 405 examinations and 89 vaccine doses for every 100 individuals in the country, at the end of last March .
Improvement in the performance of real estate markets as prices rise in Abu Dhabi for the first time in 5 years
The Central Bank said that the performance of the residential real estate markets, in turn, improved in the first three months of this year, as Abu Dhabi recorded a rise in real estate prices for the first time in 5 years, on the basis of the quarterly and annual comparison, and pointed out that prices in Dubai declined in the first quarter of the year. The current year is based on a quarterly comparison.
He pointed out that the level of employment at the end of last March remained at the same levels at the end of 2020, but salaries at the end of the first quarter of this year according to the wage protection system exceeded their levels at the end of last year, and even their levels in February 2020, the last month before the start of the pandemic. .
The report said that the number of mobile phone subscribers in the country rose for the third consecutive quarter and by about 1.7% in the first quarter of this year, on the basis of the quarterly comparison. The Purchasing Managers’ Index improved by 7.5% on an annual basis, moving towards further expansion, reaching 52.6 points in March. This reflects the improvement in confidence levels, supported by the preparations for hosting Expo 2020 Dubai.
Oil output is expected to shrink by 1% this year
The Central pointed out that the levels of tourism and hospitality in the UAE, in turn, witnessed an improvement in the first three months of this year, with hotel occupancy rising to 64%, meaning that it is approaching its levels in the first quarter of last year, which reached 69%, thanks to the resumption of international travel .
The report said that the UAE’s oil production declined by about 17.6% on an annual basis in the first quarter of this year, although it rose by about 4.3% on the basis of the quarterly comparison, in line with the OPEC Plus agreement.
He expected the oil economy to shrink by about 1% this year, based on an average production of 2.75 million barrels per day at the year’s level.
On the other hand, the Central Bank raised the growth of non-oil output for the current year from 3.6% previously to 3.8%. The Central Bank expects real GDP to grow by about 3.8% by 2022, and it is likely that non-oil output will grow by 3.9%, thanks to the rise in government spending, the healthy growth of bank credit and the strong improvement in the level of employment, in addition to the return of business confidence, especially the continuation of Expo in the first quarter of 2022.