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UAE Central Bank Starts Gradual Curb of Stimulus Measures

Vehicles stop at a red light in front of the main branch of UAE Central Bank in Abu Dhabi, January 29, 2013. REUTERS/Ben Job
Vehicles stop at a red light in front of the main branch of UAE Central Bank in Abu Dhabi, January 29, 2013. REUTERS/Ben Job
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UAE Central Bank Starts Gradual Curb of Stimulus Measures

Vehicles stop at a red light in front of the main branch of UAE Central Bank in Abu Dhabi, January 29, 2013. REUTERS/Ben Job
Vehicles stop at a red light in front of the main branch of UAE Central Bank in Abu Dhabi, January 29, 2013. REUTERS/Ben Job

The United Arab Emirates central bank (CBUAE) said on Thursday it was starting to gradually withdraw stimulus measures introduced last year to mitigate the economic impact of the COVID-19 pandemic.

The bank launched a Targeted Economic Support Scheme (TESS) to help banks provide temporary relief to companies and individuals affected by the crisis and boost lending capacity through the relief of existing capital and liquidity buffers.

"In view of the gradual increase in economic activity, the CBUAE is starting a gradual and well-calibrated withdrawal of its Targeted Economic Support Scheme to avoid restricting credit supply and economic growth", it said in a statement.

It said 15% of UAE banks' loan portfolios had benefited from a loan deferral program that is part of the scheme.

The bank will leave unchanged temporarily lowered reserve requirements for banks and the level of the loan-to-value ratio applicable to mortgage loans for first-time home buyers.

It said it was considering extending beyond the end of this year regulatory relief measures that allow banks to maintain lower capital and liquidity buffers, depending on the pace of economic recovery and loan demand.

The UAE economy is expected to grow by 2.1% this year and 4.2% in 2022, the central bank said earlier this week, supported by a recovery in global travel, a pick-up in domestic and external demand, and a successful vaccination drive.

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Attractive Environment Drives Surge in Private Tourism Facilities in Saudi Arabia

Visitors flock to one of the events of “Riyadh Season 2024” (SPA)
Visitors flock to one of the events of “Riyadh Season 2024” (SPA)
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Attractive Environment Drives Surge in Private Tourism Facilities in Saudi Arabia

Visitors flock to one of the events of “Riyadh Season 2024” (SPA)
Visitors flock to one of the events of “Riyadh Season 2024” (SPA)

As Saudi Arabia experiences a surge in visitor numbers, there is a growing need to expand tourism infrastructure to keep up with demand.

In this context, the private facilities sector has emerged as a practical solution, contributing positively to increasing the income of local citizens who own these facilities.

This growth is reflected in the significant rise in the number of licenses granted by the Ministry of Tourism, which saw an increase of 333% in 2024 compared to the previous year.

In January, the Ministry of Tourism announced a new mandate requiring booking platforms and apps to exclude or refrain from listing unlicensed private hospitality facilities.

This move aims to ensure the quality of services provided to both local and international tourists across the Kingdom. The Ministry warned that any platforms violating this directive would face penalties.

This initiative is part of a campaign which seeks to enforce compliance with tourism licensing standards and regulations, ensuring facilities meet the criteria outlined in the Kingdom's Tourism Law and its accompanying regulations.

According to preliminary data from the Ministry of Tourism, the number of licenses issued for private hospitality facilities reached 8,357 last year, compared to 1,929 licenses in 2023.

Under the Kingdom’s Tourism Law, a private hospitality facility is defined as “any furnished and independent property unit, owned by an individual, licensed by the Ministry of Tourism, and offering daily accommodation services for a fee.”

Ministry spokesperson Mohammed Al Rasasimah emphasized that the growing number of licenses issued for private hospitality facilities reflects the ministry’s commitment to enabling individual investors in the hospitality sector to obtain the necessary operating licenses.

This initiative aims to enhance the quality of services provided.

He added that these efforts are part of the "Guests Are Our Priority" campaign, which seeks to strengthen compliance with licensing and classification standards and ensure facilities meet the conditions set out in the Tourism Law and its regulations.

Dr. Salem Baajajah, an economic expert and professor at King Abdulaziz University, told Asharq Al-Awsat that the significant growth in hospitality and tourism facilities is a result of the Ministry of Tourism's efforts to attract foreign investors.

He added that this expansion reflects a growing demand from international investors seeking to capitalize on opportunities in Saudi Arabia, aligned with the Kingdom’s Vision 2030 goal of increasing the number of tourists visiting Saudi Arabia.

He further explained that the tourism sector is experiencing notable growth, contributing to higher revenues for local citizens.