In every possibility, the UAE’s economy will make a modest comeback in 2021. With the global economy recovering from the severe damages of the Covid 19 pandemic and assuming that the global World Expo takes place as scheduled with the motto of “Sustainability, Mobility and Opportunity”, the projected economy is all set to rebound with more than 3 % increase in its GDP.
UAE is the most developed and diversified economy in the Middle East, Africa and South Asia (MEASA) region and handled the covid pandemic much effectively and decisively in comparison to many countries in the world. The covid cases have been greatly contained by enforcing personal hygiene, ramping up testing capacity and spending heavily in covid public welfare and vaccine development.
Though lockdown of global economies caused a significant drop in oil prices and badly affected the aviation industry, UAE will not be impacted that severely like other oil-producing countries because of the diversified nature of its industries and continued Government support for small and medium enterprises. The business outlook in the UAE is much more promising than other regional players with more than 100 Government initiatives already launched and is still the most attractive nation for a Dubai Company Incorporation.
The Positives for the UAE’s Economic Recovery
Despite many short term challenges, the long-term economic outlook of the UAE can be extremely lucrative for new businesses and industries willing to take advantage of new opportunities with well-planned strategies and risk management. The oil and gas; power and water; petrochemicals; transport; construction and renewable sectors are the major business sectors that could offer plenty of openings for business growth and developments.
- With more than $868 billion of projects already planned and underway and $132 billion under execution, the UAE will be one of the largest project markets in the Middle East and North Africa.
- The postponed Expo 2020 will heighten the post covid business enthusiasm in the UAE.
- The UAE is well considered as the global transit hub and when travelling resumes in 2021, there will be a huge increase in the number of business and tourists.
- Abraham Accords has been signed in September 2020 and a diplomatic breakthrough reached between the UAE and Israel which promises an increased cross border investments in the areas of technology, tourism, security, health care and water with Israel and expansion in the UAE market.
- The Fintech sector has been well supported by the UAE Government and will be instrumental in future business growth.
- There has been improved domestic demand and consumer spending backed by the UAE’s large expatriate community after many months of covid restrictions.
- Reduced oil prices and covid induced drop in GDP will give rise to more than 8% fiscal deficit. However, the fiscal deficit will not pose a serious concern and could be easily financed considering huge assets held with the Sovereign Wealth Funds.
- Separate measures have been taken by the UAE free zone authorities e.g. the DIFC.
- Many business support initiatives from the UAE government for the SMEs with tax relief, incentives and filing extensions.
- AED 1.5 billion economic stimulus package from the UAE Central Bank.
Opportunities in Project and Other Sectors
More than $672 billion worth of projects are in the pipeline in the UAE out of which $417.7 billion is in the construction sector only and the remaining $ 95.3 billion in oil & gas and $ 82.9 billion for transport.
The other industries gaining momentum in demand are food, medical equipment, health care, pharma, e-commerce, delivery services and telecom and will offer tremendous business opportunities to potential investors.
IMC has a local presence in the UAE and can provide you with every support in your new Dubai business ventures with extensive knowledge and know-how on new business set up in Dubai.
