Image is Representing About Economic Effect of Covid-19 in UAE

Economic Effect of Covid-19 in UAE

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SME & MSE were already struggling with a slowing domestic demand over the last few quarters, the collapse of economic activities due to Covid 19 pandemic has raised existential questions. Globally, the coronavirus shock is severe even compared to the Great Financial Crisis in 2007–08.

The UAE regulator have plans to support banks and businesses in the country with a $27 billion economic plan as the outbreak is affecting major economic sectors such as tourism and transport etc.

Considering the economics of Gulf, we believe there are three channels which will be heavily hit with COVID-19 pandemics.

There are few potential winners in such scenarios which includes E-Commerce, Personal & Healthcare, Food processing & Retail, Medical Supply & Services, agriculture. On the other side potential losers will be Tourism & Leisure, Aviation & Maritime, Automotives, Construction & Real Estate, Manufacturing.

Oil Prices

Oil is one of the “principal” export products of GCC countries. Prices have fallen dramatically this week and talks are going amongst nations to cut the oil output. This situation is problematic for countries which rely heavily on oil revenues.

Travel and Real Estate

The UAE attracts more than 17 million visitors every year, and with the Expo 2020 happening is October, UAE hopes to attract 25 million travelers.

Spending by foreigners made particularly in Saudi Arabia for the pilgrimage, the major season of which starts in July. — will be affected by the virus outbreak.

Considering the travel ban because of COVID-19 pandemics the economic hit on Saudi Arabia and the UAE would be higher than expect

Capital Markets

There is extreme volatility in capital markets in current times, which means the investors are warried about their investments and not confident about further investments.

The companies with weak credit history will have trouble getting on to the market, creating difficulties for some corporates in the UAE who were willing to get to market this year.

Number of people getting infected with the disease is increasing day by day. To avoid the further spread government has restricted public gatherings and imposed travel ban, which is led to Middle East’s trade, finance, tourism, transportation, concerts, events, industry conferences and other such businesses to suffer through extreme economic pain

The UAE central bank said it will provide 50 billion dirhams through collateralized loans at zero cost to all banks operating in the UAE while an additional 50 billion dirhams will be freed up from lenders’ capital buffers.

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Read More:

https://www.horizonbizco.com/uae-aims-to-become-home-of-20-unicorns-by-2031/

https://www.horizonbizco.com/covid-19-measures-for-business/

https://www.horizonbizco.com/zero-rate-on-medical-supplies/

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