UAE’S non-oil economy shrank 6.2% last year, a first since 2011

The United Arab Emirates’ non-oil economy shrank 6.2 per cent last year on lower oil prices and the coronavirus pandemic, the first contraction since 2011 at least, according to preliminary government data.

Overall gross domestic product in the Arab world’s second-largest economy is estimated to have contracted 6.1 per cent in 2020, according to data cited in a statement by the Ministry of Economy.

That’s slightly more than initial projections of a 6 per cent contraction. Non-oil GDP is seen rebounding to grow 3.6 per cent this year.

“The UAE economy performed better than expected in 2020 despite the current global challenges brought about by the Covid-19 pandemic,” said Abdulla Bin Touq Al Marri, the country’s economy minister. “This is a comparatively low decline” compared to major global

economies, he added.

The International Monetary Fund forecast a 6 per cent contraction in the UAE economy, and expects GDP to recover partially this year.

The Ministry of Economy and other government entities

are working to double the economy over the next decade, to 3 trillion dirhams ($816.8 billion) from about 1.4 trillion dirhams now, he said.

“The country's economy is linked through foreign trade, foreign investment, tourism and the logistical

sector with the movement of trade and investment and global transportation, which declined significantly in 2020 worldwide,” the Federal Competitiveness and Statistics Centre said in a report.