The economic slowdown escalated to record levels in the UAE with the accumulation of crises, the most recent of which is the crisis of the emergence of the emerging coronavirus and causing it to disrupt various economic activities.
A specialized economic survey showed that the emerging crisis of the coronavirus contributed to fueling the slowdown of the non-oil private sector in the UAE, which is already suffering, bringing the situation of companies to the lowest level ever.
The IHS Market PMI for the manufacturing and services sectors in the UAE fell to 45.2 points in March compared to 49.1 in February.
This represents the largest contraction ever, amid social and travel restrictions to contain the outbreak of the coronavirus, which has hit markets.
David Owen, an economist at IHS Market, the author of the report, said, “New business volumes have declined sharply due to declining sales to consumers, reduced tourism and weak trade as countries around the world closed their borders.”
“At the same time, the closure of airports in the UAE and the policies of working from home – as we see around the world – are likely to lead to a continued decline to include April, especially since there is no end to the epidemic on the horizon,” he added.
Analysts say Dubai – the commercial and tourist hub of the Middle East – may suffer a drop in gross domestic product between 5 and 6% this year if the coronavirus related measures continue for another three to four months.
Last March, the UAE suspended all passenger flights for two weeks until April 8 to combat the outbreak of the coronavirus, and this constitutes a severe blow to the country’s vital tourism sector.
This comes as the UAE government announced doubling the financial support package to help the country’s economy cope with the repercussions of the emerging coronavirus, the day after the announcement of new measures to stop its spread, including restricting movement in Dubai.
The central bank said on its website that “the total value of all capital and liquidity measures adopted by the central bank since March 14, 2020 amounted to 256 billion dirhams,” or about $70 billion.
The UAE announced last month a $35 billion aid package, which also included support to the banking sector, facilities for granting loans and pumping money into financial markets.
The Emirate of Dubai has tightened its restrictions on movement on Saturday, announcing “tough measures to restrict the movement of individuals and vehicles throughout the emirate throughout the day for a period of two weeks, renewable.”
Various economic sectors are facing a double blow due to the widespread global coronavirus, as well as the collapse of oil revenues with the collapse of prices, which have lost about two thirds of their value since the beginning of this year, due to the frantic production war between OPEC countries led by Saudi Arabia on the one side and Russia on the other side.
The central bank’s new procedures coincide with the UAE’s formal request to postpone the “International Expo” in Dubai until October of next year 2021, while the emirate was counting heavily on it to revitalize vital sectors and remove other from its persistent few years ago, headed Real estate.
Dubai was hoping to attract about 25 million visitors to the event, which was previously scheduled to start on October 20 and last for six months.