UAE enters 'new era of growth and prosperity' under President Sheikh Mohamed's leadership

The UAE is entering a new era of "growth and prosperity" under the leadership of Sheikh Mohamed bin Zayed, the country's new President, which will be reflected through its prosperity and progress, the Central Bank of UAE's chief has said.

This will enhance the UAE's leading role as an "effective and influential" financial and economic power, and a global development model to be followed, Khaled Balama, the CBUAE's governor, said in a statement on Sunday. "We pledge to work with every effort and determination to embody [Sheikh Mohamed's] wise vision in developing the financial sector, strengthening the UAE's position as an advanced global financial centre, and supporting the comprehensive development process of the country under his wise leadership," the governor said.

The comments came after Sheikh Mohamed was elected the country's president on Saturday. The official announcement followed a meeting in Abu Dhabi of the rulers of the Emirates.

Sheikh Mohamed becomes the third president in the UAE's history, following the passing of Sheikh Khalifa on Friday.

The central bank was quick to react at the start of the Covid-19 pandemic in taking proactive measures to cushion the impact of the health crisis on the country's economy.

The UAE introduced an economic stimulus package worth Dh388 billion ($105.65bn). This included Dh50bn under the targeted economic support scheme (Tess) — a programme designed to help lenders mitigate the effects of the Covid-19 pandemic, support the country's economic recovery, and boost liquidity in the financial and banking sector.

Despite the pandemic's impact globally in 2020 that sent the world into its deepest recession since the 1930s, the UAE economy bounced back strongly and is forecast by the CBUAE to grow 4.2 per cent in 2022.

The UAE’s economy is expected to grow 4.9 per cent in 2022, according to Japan's Largest lender MUFG. Dubai's Emirates NBD forecasts an expansion of 5.7 per cent and Abu Dhabi Commercial Bank estimates 5 per cent, supported by strong oil sector growth.

Banks in the UAE have started reporting growth and will return to pre-pandemic levels of profitability in the next 12 to 18 months on the back of stronger net interest income and increasing business momentum, Moody's Investors Service said in a report in February.

Profitability will be driven by growth in net interest income, underpinned by rising interest rates expectations and strong business momentum supporting non-interest income, while provisioning efforts ease, it said.