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UAE Central Bank Expects GDP to Grow 2.5% in 2021, 3.5% in 2022

UAE Central Bank (WAM)
UAE Central Bank (WAM)
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UAE Central Bank Expects GDP to Grow 2.5% in 2021, 3.5% in 2022

UAE Central Bank (WAM)
UAE Central Bank (WAM)

UAE's GDP growth is forecast to pick up to 2.5 per cent and 3.5 per cent, respectively in 2021 and 2022, according to a recent report by the Central Bank of UAE (CBUAE).

The country’s non-oil GDP will grow by 3.6 percent during this year and will reach 3.9 percent in the upcoming year.

The Central Bank had confirmed that the targeted comprehensive economic support plan has achieved remarkable positive results within a year since its launch, paving the way for the strong recovery from the repercussions of the Covid-19 pandemic.

The bank also launched two new payment system regulations aiming to promote robust financial infrastructure, which is essential for financial stability and consumer protection.

The two systems, the Large-Value Payment Systems (LVPS) Regulation and the Retail Payment Systems (RPS) Regulation, also facilitate the UAE’s international competitiveness.

Governor Abdulhamid al-Ahmadi remarked that payment systems are the “plumbing of the financial system” a critical part of any country’s financial infrastructure.

Ahmadi asserted that the issuance of the two regulations is an important milestone to reach the objective of providing robust, efficient, and accessible financial infrastructure in the UAE, serving the financial institutions, corporations, and people, and supporting the country’s competitive economy.

“The large value and retail payments systems regulations will help facilitate smooth, secure, and efficient conduct of transactions. The retail payments regulation will also provide a level playing field to advance innovation and competition, and financial inclusion.”

The LVPS regulation sets standards for financial infrastructure systems that support wholesale payment activities in the UAE.

As for the RPS regulation, it focuses on systems for retail payments, which provide funds transfer, clearing, and settlement services related to retail activities. The regulation covers all retail payment systems irrespective of currency or means of exchange in which the transactions are conducted.

The Bank explained that system operators and settlement institutions of existing large-value payment systems and retail payment systems operating in the UAE must comply with the requirements of these two regulations by the end of February 2022.

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US Job Growth Surges in September, Unemployment Rate Falls to 4.1%

A woman enters a store next to a sign advertising job openings at Times Square in New York City, New York, US, August 6, 2021. REUTERS/Eduardo Munoz/File Photo
A woman enters a store next to a sign advertising job openings at Times Square in New York City, New York, US, August 6, 2021. REUTERS/Eduardo Munoz/File Photo
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US Job Growth Surges in September, Unemployment Rate Falls to 4.1%

A woman enters a store next to a sign advertising job openings at Times Square in New York City, New York, US, August 6, 2021. REUTERS/Eduardo Munoz/File Photo
A woman enters a store next to a sign advertising job openings at Times Square in New York City, New York, US, August 6, 2021. REUTERS/Eduardo Munoz/File Photo

US job growth accelerated in September and the unemployment slipped to 4.1%, further reducing the need for the Federal Reserve to maintain large interest rate cuts at its remaining two meetings this year.
Nonfarm payrolls increased by 254,000 jobs last month after rising by an upwardly revised 159,000 in August, the Labor Department's Bureau of Labor Statistics said in its closely watched employment report on Friday.
Economists polled by Reuters had forecast payrolls rising by 140,000 positions after advancing by a previously reported 142,000 in August.
The initial payrolls count for August has typically been revised higher over the past decade. Estimates for September's job gains ranged from 70,000 to 220,000.
The US labor market slowdown is being driven by tepid hiring against the backdrop of increased labor supply stemming mostly from a rise in immigration. Layoffs have remained low, which is underpinning the economy through solid consumer spending.
Average hourly earnings rose 0.4% after gaining 0.5% in August. Wages increased 4% year-on-year after climbing 3.9% in August.
The US unemployment rate dropped from 4.2% in August. It has jumped from 3.4% in April 2023, in part boosted by the 16-24 age cohort and rise in temporary layoffs during the annual automobile plant shutdowns in July.
The US Federal Reserve's policy setting committee kicked off its policy easing cycle with an unusually large half-percentage-point rate cut last month and Fed Chair Jerome Powell emphasized growing concerns over the health of the labor market.
While the labor market has taken a step back, annual benchmark revisions to national accounts data last week showed the economy in a much better shape than previously estimated, with upgrades to growth, income, savings and corporate profits.
This improved economic backdrop was acknowledged by Powell this week when he pushed back against investors' expectations for another half-percentage-point rate cut in November, saying “this is not a committee that feels like it is in a hurry to cut rates quickly.”
The Fed hiked rates by 525 basis points in 2022 and 2023, and delivered its first rate cut since 2020 last month. Its policy rate is currently set in the 4.75%-5.00% band.
Early on Friday, financial markets saw a roughly 71.5% chance of a quarter-point rate reduction in November, CME's FedWatch tool showed. The odds of a 50 basis points cut were around 28.5%.