UAE to stage gradual recovery in mid-, late-2021, says Etihad Credit Insurance CEO

The ECI's focus in the second half of 2020 would be to help advance domestic companies

  
 Abdullah Ahmad Al Ghurair, the founder of Mashreqbank, headed the UAE list of billionaires with $5.9 billion worth of assets

Abdullah Ahmad Al Ghurair, the founder of Mashreqbank, headed the UAE list of billionaires with $5.9 billion worth of assets

Getty Images/Deepak Kurup / EyeEm

The UAE economy is expected to stage a gradual recovery towards pre-Covid-19 levels in the mid to latter part of 2021 and a full recovery in 2022, said Massimo Falcioni, chief executive officer of Etihad Credit Insurance (ECI).

In an exclusive interview with Khaleej Times, Falcioni said: "ECI has always been steadfast in supporting UAE companies, and our commitment has become much more visible as businesses navigate the socioeconomic impacts of the Covid-19 pandemic."

During this crisis, ECI continues to offer financial solutions to ensure business continuity, without increasing our premiums/fees despite the intensified commercial and political risks it faces today.

"Our trade credit solution, for one, helped UAE exporters to not only stay competitive in the international markets, but to also get substantial protection from their buyers' non-payments and to protect their cash flow/liquidity. Because of the crisis, the likelihood of default in payment is further heightened due to the business liquidity squeeze caused by the supply chain disruption," added Falcioni.

Besides Covid-19, there are other negative factors at play weighing on the UAE economy, such as low oil prices and a strengthening currency.

Domestic demand in the UAE will also not be able to recover fully until overseas demand starts normalising; various sectors of the country's economy like trade, tourism, real estate, leisure, hospitality and domestic manufacturing rely heavily on inbound and outbound flows.

However, continued government stimulus measures, a gradual easing of the restrictions, the upcoming Dubai Expo in 2021 and other factors will eventually help the economy to revert to its pre-Covid levels towards the end of 2021, said the ECI chief.

ECI has become a catalyst as the nation mounts a prosperous recovery from the crisis by playing two roles - as a stabiliser and an accelerator.

Aside from its exemplary initiatives against Covid-19, the UAE is also sought-after by nations because of the critical role it plays in the success of the Belt and Road Initiative, the most ambitious global infrastructure undertaking that is seen to help various countries recover from the financial blow caused by the pandemic.

The UAE has successfully positioned itself as a focal point of global business, but it is in the midst of the pandemic that the world has truly witnessed its real competence in terms of governance and economic support. It is, for one, among the few nations to roll out impressive stimulus packages and fiscal initiatives that helped companies avoid total shutdown as a result of the economic pressure posed by the pandemic.

Also, the Central Bank of the UAE has rolled out stimulus packages worth about Dh100 billion, majority of which had been earmarked towards SMEs as well as consumers. Emirates like Dubai and Abu Dhabi have announced individual fiscal packages in addition to the Dh16 billion stimulus announced by the UAE cabinet for all seven emirates. In total, the combined size of all the stimulus programmes now exceeds Dh120 billion.

The ECI's focus in the second half of 2020 would be to help advance domestic companies.

"We have begun forging partnerships with various federal institutions and foreign entities to find innovative methods of generating commercial and financial growth in the post-crisis era. Some of the agreements we have recently signed include those with Dubai Islamic Economy Development Centre, which intends to upkeep UAE exporters through Shariah-compliant export credit solutions; Bpifrance Assurance Export, which aims to improve the trade relations between France and the UAE, as well as augment the growth of exporters and SMEs; and the Sharjah Chamber of Commerce and Industry, which aims to educate on ways to mitigate the impact of Covid-19." said Falcioni.


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