Analysts believe that the UAE is a much stronger economy compared to other GCC countries and will survive the current pandemic crisis with the help of cutting-edge technologies.
The American-based market research and analysis firm Frost & Sullivan’s managing partner Sarwant Singh, says that the UAE’s recovery strategy is better than the previous recessions even though it is a different situation this time.
The pandemic has severely affected the hospitality, retail, real estate and aviation sector which are the major sources of the UAE, therefore only the future economic policies can pave the way for its fast-track recovery. Currently, these future policies are indicating a more dynamic move towards diversification and it will gain greater momentum across the GCC, added Singh.
Further, he added that the country targets the development of next-generation sectors which include Edu-tech, gaming, fintech, health tech and hi-tech manufacturing. The UAE’s commitment to creating a circular economy will help it to navigate the current decline successfully by attracting new foreign investments.
The GCC governments have allocated two percent to 30 percent of its GDP for the economic stimulus packages and the region’s business environment will witness a transformation that will have a long-term impact on the social as well as economic development.
The analytics firm opined that the increasing digital transformations in the coming years will support the non-oil sector of the GCC region like retail, healthcare, education, mega-event projects and renewable energy to rule the economy.
“The only sector that saw halt was restaurants. But other than that, good growth has been seen in other sectors. By the end of the year, we’ll see a very good chance as the situation is going to be better. Compared to the beginning of the year, we are going to be much better than any other country in terms of production.”
Signs of recovery
Frost & Sullivan says that from the second quarter of 2021 onwards the GCC region can experience signs of an economic recovery and will witness magnificent development through 2030.
Malabika Mandal, visionary innovation group consulting analyst at Frost & Sullivan says that although the pandemic and falling oil prices caused the contraction in 2020, by next year an impressive growth can be witnessed. And it will be mainly due to the efforts to divert their oil-dependent economy to other sectors and policies to encourage private investments in major sectors of the region.
She added that the GCC region is expected to decline in 2020 before rebounding in 2022 and will witness a magnificent growth by 2030.
Florence Eid-Oakden, CEO and chief economist at Arabia Monitor, said a potential second wave of Covid-19 is delaying the economic rebound into the latter part of 2021 for the Mena region.