The rapid rollout of the Covid-19 vaccine in the UAE could support a more rapid recovery in domestic tourism and provide a vital boost to the hospitality and retail sectors, Moody’s Investor Service said as it forecast a stable outlook for the economy.
The global rating agency gave the Arab world’s second-largest economy Aa2 stable outlook and predicted the country’s nominal GDP would bounce back to pre-pandemic levels over the next three years.
At $63,590 in purchasing power parity terms, the UAE’s 2019 GDP per capita ranks as one of the highest in the world, said the rating agency.
The country’s economy, most diversified among its GCC peers, is also relatively large in nominal GDP terms – at $354 billion in 2020 – and ranks in the top quartile of the sovereigns we rate, pointing to above-average resilience to shocks, Moody’s said.
Ranking 25th globally, the UAE is well-positioned to make further progress in developing its non-oil economy. “The UAE economy benefits from advanced infrastructure, a conducive institutional and tax environment, and efficient markets for goods and labour, which combine to produce the highest World Economic Forum competitiveness index in the Middle East and North Africa region.”
The UAE benefits from a large positive net international investment position (NIIP), although it is not officially published. Abu Dhabi Investment Authority (Adia’s) assets, estimated at approximately 234 percent of the UAE’s GDP in 2020 and invested primarily overseas, represent the main component of the country’s NIIP, far exceeding the stock of external debt (estimated at 99 percent of GDP in 2020). At their current levels, combined assets of Adia and the UAE Central Bank are sufficient to cover the country’s external debt and decades of current-account deficits, said Moody’s.