The UAE’s metropolis Abu Dhabi’s fiscal standout remains robust over the forthcoming two years as anticipated by the global rating agency S&P, despite the ongoing and enduring COVID-19 Pandemic’s ordeal is yet an uncertain story.
As recently stated by the global ratings agency leader S&P, the UAE’s giant metropolis, Abu Dhabi is in contention to overview its GDP to have a moderate progression from 2021 and touch 2019 levels in forthcoming two years in 2023 on the rear of upsurging native demand as well as intensive oil manufacturing and budgets.
Primary credit analyst at S&P, Trevor Cullinan, stated that; “We expect regional geopolitical tensions will, on balance, have a limited impact on Abu Dhabi, and we also expect continued domestic stability.”
As stated by the S&P analyst recently in a note that, “We estimate Abu Dhabi’s GDP per capita at $98,000 (Dh360,000) in 2021. This per capita figure is supported by our estimate of a contraction in Abu Dhabi’s population over 2018-2020 by more than 16 per cent. The population has declined owing to relatively weak economic activity in recent years and the restructuring and consolidation of several GREs (government-related entities). We expect the population will increase by about two per cent annually over the period to 2024 as domestic demand and investment pick-up after the sharp contraction in 2020.”
It also added that the UAE’s metropolis Fiscal standout to be enduring a robust turnaround over the forthcoming two years and an upsurge within the emirate’s population in the wake of Covid-19 pandemic.
S&P guesses oil production of UAEs metropolis Abu Dhabi will be coming back to the 2019 level within the forthcoming two-three years during 2023-2024. Abu Dhabi’s oil production tanked to an average of 2.8 million barrels per day (bpd) in 2020, from 3.1 million in 2019.
Cullinan further stated that; “As a result, we project hydrocarbon sector growth of about 2.7 per cent annually over the forecast period. The non-oil sector should increase by about 1.7 per cent annually, an acceleration in the pace of growth relative to the years prior to the pandemic, fuelled by government and GRE investment programmes.”
“We assume an average Brent oil price of $60 per barrel for the remainder of 2021 and also for 2022, with our longer-term oil price assumption falling to $55 for 2023 and beyond,” S&P stated.
Oil prices progressed to $70 on Tuesday as confidence nurtured over the fuel mandate outlook during the summer powered season of the US. Nation-owned oil producer Abu Dhabi National Oil Co. (Adnoc) has declared investments of around $121 billion between 2021-2025, that is nearby to 10 percent of GDP.