New UAE stimulus package to bolster economy

The United Arab Emirates will deliver a three-stage “flexible package” of measures to bolster the economy, including steps to support the labor market and encourage investment, the state news agency stated on Wednesday.

Economy Minister Abdullah bin Touq Al-Marri, told WAM that said the proposals would provide “studied” stimulus packages.

In March, the UAE’s central bank unveiled a Dh256 billion ($70 billion) stimulus package to aid businesses amid the coronavirus pandemic.

Measures have been taken to protect jobs and help businesses survive, including budget allocations to small and medium sized enterprises, reducing employer recruitment costs, the establishment of a virtual labour market and the automatic renewal of visas for workers.

Business conditions improve

Business conditions improved in July for the UAE’s non-oil private sector, following the  easing of lockdown restrictions, according to data from the latest UAE Purchasing Manager’s Index.

The headline IHS Markit UAE PMI rose from 50.4 in June to 50.8 in July, to signal a second successive monthly improvement in business conditions.

Job gains, however, are not at pre-COVID levels as the rate of growth remained “marginal” and that the recovery was “mild” following the downturn experienced by UAE businesses as a result of the COVID-19 pandemic.

Job generation is still a challenge in the UAE, as well as Saudi Arabia and Egypt, despite a stronger pickup in non-oil private sector activity in July, according IHS Markit.

The state news agency, however, said that small- and medium-sized enterprises (SMEs) will get support in the first stage of the plan, with efforts to promote tourism. The following two stages will focus on sustainable long-term economic growth.

In June, the UAE Central Bank stated that it expects the country’s non-oil economy to contract 4.1% this year due to the pandemic.