A COVID-19 vaccine can expedite UAE’s economic recovery

The approval of the COVID-19 vaccine, which is expected to be available by the end of 2020, would accelerate the recovery of key sectors in the UAE including retail, travel and tourism, entertainment, commerce and real estate.

Tedros Adhanom Ghebreyesus, Director-General of the World Health Organisation (WHO), has been hopeful that a vaccine against COVID-19 could be ready by year-end. As much as nine experimental coronavirus vaccines are in the production stage across various countries.

Due to travel bans and lockdowns, the UAE economy was initially hit hard, as with others globally, causing the entire economy to stop for the time being as main pillars such as tourists and traders were unable to transact freely during the stoppage period.

However, the UAE has put in place comprehensive and designed sound policies to resolve COVID-19, ensuring that not only active cases are under surveillance, but that it also helps to restore regular business activity.

Vijay Valecha, Century Financial chief investment officer, said the availability of a vaccine is likely to mean the elimination of the fear factor among the global population. It will help people to get away from the tensions of lockdown and travel bans and also it lets people travel without any fear.

Roberto D’Ambrosio, CEO of Axiory Global, said that the global economy would have a positive effect if a safe vaccine were to be found for COVID-19.

“Travel and tourism will be the most impacted in the very short term, while real estate will follow suit right after as confidence from foreign investors, who again be able and willing to travel to the UAE to evaluate their investment in person, to invest in the UAE will definitely rise. From a UAE perspective, another very important impact of a cure or a vaccine being clearly identified and available on a large scale is the acceleration that will definitely impact the expectations on the recovery of the global economy towards pre-pandemic trade and production levels and the avoidance of a strong second wave that would really cause economic and social havoc.”

Mr. D’Ambrosio added that the direct outcome of such an optimistic outlook would be the increase in oil demand that would most likely follow and benefit the UAE.

Mr. Valecha said that in the coming months, UAE and global investors are gradually betting on expectations of a COVID-19 vaccine.

“Looking at the absolute impact of vaccine availability on the economy, the UAE is likely to ride economic growth by its virtue of being a trade, transport and tourism hub. This would also mean that the UAE will act as a pillar and driver for economic growth across the Mena region with GCC neighbors likely to benefit the most,” he added.

Sector-wise, on the back of vaccine availability, the retail and tourism sectors are likely to outperform other conventional core sectors.

“The UAE as a tourist destination will again be on every tourist’s radar. Similarly, on the trade and retail sector side, there could be further inflow and outflow of goods and services as more and more economies open up their borders for cross-border trade flows,” concluded Mr. Valecha.