WEEKLY BUSINESS ROUNDUP - 12th March 2023 – 18th March 2023

Global economic growth to hit 2.6% in 2023 & 2.9% in 2024

As per OECD’s Interim Economic Outlook report global economic growth is expected to reach 2.6% in 2023 and 2.9% in 2024 catalyzed by improved business and consumer confidence, declining food and energy prices and the renewed momentum in Chinese economy. Headline inflation is expected to eventually recede through 2023 across G20 countries from 8.1% in 2022 to 5.9% in 2023 and 4.5% in 2024.

 

Despite slowdown in global M&A activity, mergers and acquisitions in the Middle East mark an upward trajectory in 2022

While global M&A activity slowed down, the Middle East region has sustained an upward trajectory in mergers and acquisitions with a series of $1bn-plus transactions taking place across different industries in 2022. This positive momentum is largely attributed to elevated oil prices, increased fiscal discipline, higher economic flexibility and growth within the region. Majority of the M&A activities in the Middle East were concentrated in UAE, Saudi Arabia and Egypt constituting 89% of the region’s total deal volume.

 

AED 83.3 bn provided by banks in financial facilities to SMEs by end of 2022

As per data released by the Central Bank of UAE, the accumulated balance of financial facilities and loans extended by banks to Small and Medium Enterprises (SMEs) amounted to AED 83.3 billion by the end of 2022. Loans given to SMEs made up 10.4% of the total accumulated balance of financial facilities for the trade and industrial sector, amounting to AED 799.1 billion by December 2022.

 

UAE reports 19% consumer spending growth in 2022

As per the ‘State of the UAE Retail Economy’ Q4 report overall consumer spending stood at 19% in 2022 compared to 2021. UAE’s retail economy marked 13% growth in 2022 and this rise was driven by surge in international visitors to the UAE - which more than doubled to 14 million in 2022.  Additionally, UAE, being one of the world’s fastest growing e-commerce market has a sales forecast to reach USD 9.2 billion by 2026.

 

UAE and Georgia enter Comprehensive Economic Partnership Agreement

UAE and Georgia successfully concluded the UAE-Georgia Comprehensive Economic Partnership Agreement (CEPA) further strengthening integrated economic relations between both countries. During a UAE delegation’s visit to Georgia, the signing of CEPA took place along with a meeting of the UAE- Georgian Business Forum. The agreement will enhance and diversify bilateral trade and economic relations by eliminating or significantly reducing tariffs, removing non-tariff barriers, and promoting trade in goods, services, and investment.

 

Tax revenue in UAE surged 29% in Q4 2022

The UAE Ministry of Finance reported UAE government’s tax revenues increased 29% in Q4 2022 totalling to AED 75 billion from AED 58 billion in the year-ago period. The UAE government's total revenue in Q4 2022 rose 7% year-on-year (YoY) to AED143.1 billion compared to AED133.9 billion for the same period in the previous year.

 

UAE and China explore joint investment opportunities in new sectors

At the recently held UAE – China Economic Forum, high level leaders from both countries stressed on the importance of strategic partnership and cooperation to drive trade and economic growth. UAE is China’s first Arab and Gulf trade partner and the value of non-oil intra-trade between the two countries amounted to more than AED 264.2 billion (US$72 billion) in 2022, achieving a growth of 18% compared to AED 223.8 billion (US$ 61 billion) in 2021.

 

FTA launches ‘Muwafaq Package’ to enable SMEs in doing business

The UAE’s Federal Tax Authority launched the ‘Muwafaq Package’ initiative to facilitate executing business and tax compliance within SMEs by offering a set of customised services, incentives and privileges.  This initiative falls under the FTA’s strategy to support the Government Accelerators Project launched by the UAE government. The Muwafaq Package can be accessed by SMEs registered in the tax system in the UAE through the digital tax services platform EmaraTax.

 

CBUAE and Reserve Bank of India sign MoU to promote innovation in financial products and services

The Central Bank of the United Arab Emirates (CBUAE) and the Reserve Bank of India (RBI) signed a Memorandum of Understanding (MoU) to jointly enable innovation in financial products and services. The two central banks plan to collaborate on various emerging areas of Fintech including Central Bank Digital Currencies (CBDCs). The MoU includes technical collaboration and knowledge sharing on matters related to Fintech, financial products and services, such as emerging trends, regulations and policies.

 

Etihad Credit Insurance reports 26% increase in value of insured non-oil commercial exports

Etihad Credit Insurance (ECI), the UAE Federal export credit company, in its recent meeting discussed alignment to the initiatives outlined under the “We in the UAE 2031” strategy. ECI reinforced its focus on developing the UAE’s non-oil exports and offering solutions to address challenges related to trade credit, project financing, and SME development. ECI  recorded  26% increase from 2021 in the value of non-oil insured turnover secured for exporters and SMEs -  amounting to AED 14.4 billion in 2022. The agency also issued 8,140 revolving credit limits in 2022 marking 23% hike in 2021. 

 

Department of Municipalities and Transport (DMT) revealed service fees were reduced to 6% in 2022

DMT reported that service fees for real estate units’ owners and investors in development projects were reduced by 6% during 2022. This reduction in service charges led to property owners and investors saving over AED37.2 million in 2022. This move is a step in the right direction to boost the attractiveness of real estate investment in the emirate and will go a long way in helping owners lower operating costs and increase returns for citizens and residents based in Abu Dhabi.