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Global economic outlook remains uncertain amid second wave of COVID-19, Obaid Al Tayer says

November 24, 2020
finance & economy

ABU DHABI, 23rd November, 2020 (WAM) -- Obaid Humaid Al Tayer, Minister of State for Financial Affairs, participated today in the Fifth Annual Arab Fiscal Forum, which is organised by the Arab Monetary Fund, AMF, in cooperation with the International Monetary Fund, IMF.

Held under the banner ‘COVID-19 Pandemic and Lifeline Support in Arab Countries’, the forum sought to discuss the challenges facing economic policymakers in the Middle East in light of the COVID-19 pandemic, and devise ways to mitigate the pandemic’s repercussions.

Obaid Humaid Al Tayer; Dr. Abdulrahman bin Abdullah Al Hamidy, Director General and Chairman of the Board of Executive Directors of the AMF; and Kristalina Georgieva, Managing Director of the International Monetary Fund, IMF, were present at the forum, which took place virtually. Arab finance ministers; central bank governors; Arab monetary institutions; as well as a number of senior officials and experts from regional and international financial institutions; Arab finance ministries and central banks also participated in the forum.

In his opening speech, Al Tayer welcomed the participating delegations, and stressed on the importance of this forum that serves as a pioneering platform aimed at creating opportunities to share experience and discuss challenges of public policy in the context of current economic and financial developments. He called on opening channels for constructive and fruitful dialogue, to exchange experiences and devise proactive strategies and plans based on clear data and visions.

He said: 'We meet today in challenging times, as all countries face unprecedented global struggle with the COVID-19 pandemic, which have far-reaching consequences for the global economy. Measures to contain its spread have led to a sharp decline in economic activity worldwide. It has dramatically affected global public health. COVID-19 has resulted in the deepest global recession since the great depression, resulting in a profound global socio-economic repercussion.'

He added: 'The global economic outlook remains uncertain as a result of the second wave of the COVID-19 epidemic and its impact on many major economies, as the situation remains precarious in many countries. The Arab Monetary Fund estimates that Arab countries recorded a contraction of 4.0 percent in 2020, compared to a growth rate of 1.6 percent in 2019 - a reflection of the effects of the pandemic, which is expected to lead to a decrease in external demand, which contributes about 48 percent of total demand in Arab countries; a decline in remittances from overseas workers; as well as a decline in foreign direct investment volumes and capital flows.'

He said: 'The current circumstances revealed that success in containing the virus comes at the expense of economic activity, so it is necessary to reconsider the way services are provided and prepare for the next stage after the epidemic because the post-Corona world will differ entirely from its predecessor. The ability to cope with the consequences of the crisis and the mitigation of its economic repercussions require the development of an unconventional rescue programme that will be able to adapt and deal wisely and appropriately with all the pandemic impacts.'

At the end of his speech, Al Tayer indicated that the UAE has implemented a range of appropriate measures to mitigate the economic damage, including fiscal packages; relaxation of monetary and macro prudential rules; and injection of liquidity in the banking system that amounted to US$78 billion.

The forum discussed various fiscal policy issues and prospects for economic and financial development, as well as the requirements needed to enhance social protection and support low-income families, and ways to support economic growth to enhance financial stability.

wam

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