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Market Overview

Globally and in the UAE, 2021 saw a return to economic growth and positive macro momentum driven by the global COVID-19 vaccine programme rollout, improving business and consumer sentiment, and the impact of global monetary and fiscal support measures. That said, the recovery outlook remained uneven and continued to face sustained challenges towards year-end, including increasing COVID case numbers and associated volatility.

UAE economy on a robust growth trajectory

The United Arab Emirates continued its economic rebound on the back of its world-leading COVID-19 vaccination programme, clearly reflected in consumer spending exceeding pre-pandemic levels as well as PMIs averaging two-year highs.

In addition to the various supportive fiscal, monetary and regulatory measures, federal and regional governments introduced new initiatives and continued to commit to large investments to shore up business confidence and sustain the economy’s positive momentum.

In the year ahead, faster GDP growth is expected in the UAE and across the GCC, underpinned by higher oil prices, Expo 2020, and a rebound in the real estate market and non-oil economy. Ongoing structural reforms, as well as investments in infrastructure and energy towards net-zero commitments, look to attract FDI and stimulate economic activity. Consequently, real GDP growth for the UAE is expected to increase from an estimated 3.2% in 2021 to 4.8% in 2022.


Sound and highly capitalised banking sector

The UAE Central Bank’s TESS programme, which was extended to end-June 20211, and associated stimulus measures have supported the UAE’s financial system and the nation’s economic recovery. Meanwhile a rising interest rates structure, as the economic outlook brightened during 2021, provided a solid fillip for the UAE banking sector.

Throughout the year, liquidity levels remained high, while total assets in the UAE’s banking sector grew 3.4% year-to-date to reach USD 897 billion and total deposits rose 4.4% year-to-date to reach USD 536 billion, as of November 20212.

Looking forward, a robust deal pipeline across the region, including DCM, M&As and IPOs, as well as rising interest rates and increased business and consumer confidence support positive expectations for the banking sector as we enter 2022.


Annual Report
Annual Report
Annual Report
Annual Report

[1] TESS Recovery was extended to 30 June, 2022, while the TESS Deferral Programme expired on 31 December, 2021
[2] Based on the latest CBUAE data, as of November 2021
[3] In-house GDP forecast for FY’-21FY’23; IMF forecasts for prior years
[4] Bloomberg OPCRUAE Index
[5] Bloomberg, Federal Funds Target Rate

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