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Impact of Coronavirus on UAE Economy

April 6, 2020 Comments Off on Impact of Coronavirus on UAE Economy

The whole world is facing a severe epidemic that has brought the working of the world as an entire to a halt. There are specific industries that are more affected by this virus. Still, by practicing social distancing and by following basic hygiene practices, the globe as a whole will overcome this problem and emerge victoriously.

What is Corona Virus?

The Corona Virus is a protein strand that is encapsulated by a layer of fat. This virus is very similar to the previously encountered SARS and MERS virus and has been named scientifically as Sars-CoV-2 but the spread of this virus was limited. The disease which is caused by this virus is called COVID-19 (which is short for Corona Virus Disease in 2019).

In most of the cases, once affected the host starts showing flu-like symptoms such as cough, fever, sore throat, etc. and ultimately may result in death.  However, the chances of it being fatal are comparatively less and affect mostly to older people (according to the present reports). The thing which makes it a hazardous virus is that it can take up to 14 days for a host to show symptoms. This means that a person can affect others and not even know that the person is sick.

Impact on UAE

The depth of the effects of the COVID-19 disease is still unknown, but the UAE Government is getting prepared for any and every eventuality. The most hit industries will comprise of Travel and Tourism Industry, Hospitality Industry and the impact may get deeper if the virus is not brought under control.

Seeing the gradually escalating situation, the UAE Federal Cabinet passed a resolution which will help in the establishment of a committee that will address the Impact of the coronavirus on the economy.  The committee will be head by Sultan bin Saeed Al Mansour, Minister of Economy. One of the main objectives of this committee is to help the various departments of the country to work together for the betterment of the economy of the country.

The Central Bank of the UAE has taken the initiative and rolled out a stimulus package of Dh100 billion. This is one of the measures to taken up by the Government of the UAE, which will help in encourage lending to the Small and Medium enterprises and also limit the volatility in the stock market.

The Central Banks have also reduced the amount to be held by the banks, which will, in turn, help in the access to financing. It will also change its regulations about the minimum balance need to be kept in the bank account. It will also adopt new and suitable rules which will reduce the fees incurred by the merchants when they pay using debit or credit cards.

The coronavirus epidemic the most significant disaster situation which has been faced by the world since the financial crisis of 2008. Countries and organizations from all over the world have united to assist each other in this time of need. Organizations such as the International Monetary Fund (IMF) and the World Bank have pledged to extend the help of $60 billion to the countries in need worldwide. The government has recently announced a stimulus package in both Dubai and Abu Dhabi which will help the industries to stand on their feet.

The Economic Future

The Corona Virus has taken up the world by surprise. There were a number of events that were scheduled for the future which would have improved the economy of the United Arab Emirates. The biggest of them all is the World Expo 2020, which was to be held in Dubai. Due to the present circumstances, all significant events have been postponed for a future date, and the existing businesses have been hugely affected. Especially the Travel and Tourism business, Hospitality business and the Transport business.

With the timely action of the governments and the resolve of the people to overcome this situation, we can emerge victoriously. Moreover, this is the best time to understand about the finances of our venture and take care of the economic aspect of the business. Thus it is imperative to avail of the services of a financial consultancy.

If you are looking for a financial consultancy firm in the United Arab Emirates which will take care of the financial aspect of your business and provide you with relevant and periodic advice on how to make use of your company finances in the best possible way, then you must have a look at the services provided by JAXA Chartered Accountants. For more information on the services offered, Contact Us. We will be happy to help.