The COVID-19 pandemic had forced countries globally to postpone their economic activities, including the UAE.
The Arab world's second-largest economy recorded a 6.1 percent contraction in 2020 as tourism and oil became two of the most severely damaged sectors due to the global crisis.
The lockdown of mobility and international trade had put the region into its first recession since the financial crisis in 2009.
However, the UAE's economy expects to vastly rebound as the region distributes vaccines to contain the spread of COVID-19. Today, UAE is among the fastest globally to inoculate its citizens, with 64.7 percent of the population vaccinated, or equivalent to 12.6 million administered vaccines.
The tactful measure of vaccine progression hopes to help jumpstart UAE's tourism while gradually restoring supply for future oil demands once the price stabilizes.
The plan to hold FIFA World Cup 2022 in Qatar would be essential in inviting tourists into the UAE and putting the region's tourism and hospitality sectors on the pre-pandemic level.
Aside from tourism and oil-focused accommodative measures, the UAE governments combined have spent over USD 395 billion to cushion the region's recovery from the COVID-19 pandemic.
Among the many pandemic-induced approaches, one of the more significant was the Central Bank's Targeted Economic Support Scheme which provided a zero-cost loan initiative to improve the monetary traffic within the region until mid-2022.
This year, the UAE's credit growth improvement and positive spending would dampen the COVID-19 after effects, putting the region in a bright light seen through the government forecast of a 3.5 percent inflation.
Moreover, the increasing demand for hydrocarbon energy would also catalyze the UAE's growth as the third-largest oil exporter from the Gulf. The hydrocarbon industry is forecasted to answer over 6 million barrels per day by the end of this year.
However, the oil-driven region still faces the lingering concern of oil prices. 2020 has seen a 20-year low on oil prices that resulted in price wars during the COVID-19 pandemic.
Today, the cost of oil remains in the range of USD 50 to 60 per barrel, which is still under the required balance to the country's budget breakeven. Therefore, the prolonged pace of oil recovery puts the UAE in a challenging position to survive the instability of the sector.
All in all, the UAE has implemented a high caliber approach to obtain prosperity in the post-pandemic era - from riding the wave of digitization, facilitating demands of renewable energies as countries take on the pledge to reduce their carbon emissions, to optimizing the existing resources necessary for the region's rebound. However, the road ahead still poses challenges and concerns that public and private institutions need to tackle.
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