The Central Bank expects the country’s GDP to grow by 7.6% in 2022

Abu Dhabi, May 10 / The Central Bank of the United Arab Emirates revealed its annual report for the year 2022, in which it reviews the most important achievements and initiatives that enhance monetary and financial stability in the country, in addition to the projects and initiatives that were launched during the year 2022.

The report referred to the Central Bank’s regulatory and supervisory achievements in enhancing monetary stability and flexibility of the financial sector, and supporting economic activity in the UAE.

It also sheds light on economic developments locally, regionally and globally, which confirm that the UAE economy was among the best performing global economies supported by the decisions and directives of the wise leadership, proactive measures, and the reopening of the economy after the “Covid-19” pandemic.

The report indicates that the gross domestic product of the UAE is expected to have grown by approximately 7.6% during the year 2022, supported by remarkable activity in all sectors, which is one of the highest growth rates at the global level, which has witnessed a slowdown due to high global interest rates. and geopolitical tensions.

Despite the sharp rise in global inflation in light of the pressures on supply chains and the rise in commodity prices, inflation in the UAE remained well below the global average and recorded 4.8%, with an expected decrease in 2023.
In light of expectations of a global economic downturn and recession, the Central Bank, headed by His Highness Sheikh Mansour bin Zayed Al Nahyan, Vice President, Deputy Prime Minister, Minister of the Presidential Court, Chairman of the Board of Directors of the Emirates Central Bank, continued to implement its macro and monetary prudential policies, taking into account The strategic roadmap pursued by the UAE government to maintain the country’s competitiveness, ensure high economic growth, while creating and securing job opportunities for citizens.

The report indicated that the Central Bank achieved an important step by ending most of the temporary support measures aimed at supporting borrowers to face the repercussions of the “Covid-19” pandemic. This step reflects the return of the banking system to pre-pandemic levels of profitability and financial strength.

According to the report, the banking sector continued to support the economy through lending to the private sector, and the assets of the banking sector and total written premiums in the insurance and bank credit sectors increased, while the Central Bank conducted regular assessments of asset quality.

In the framework of strengthening its role as a supervisory and supervisory authority over the financial and insurance sector in the country, the Central Bank has strengthened the supervisory frameworks for licensed financial institutions, especially in the field of corporate governance and risk management of insurance companies, which contributed to the development of the control environment for insurance companies and related professions operating in the country.

The Central Bank also conducted basic reviews, follow-up and objective assessments of potential risks facing licensed financial institutions with the aim of measuring their financial performance, and verifying enhanced regulatory requirements, including capital, liquidity, profits, credit quality, service control measures and operational flexibility.

It strengthened its supervisory cooperation, transparency and coordinated oversight procedures on the external operations of locally established banks, as it conducted six external tests based on its risk-based supervisory and control plan.

The report states that under the newly published regulatory framework, the Central Bank has granted new licenses to specialized banks, stored value facilities, and retail payment service providers.

The Central Bank also succeeded in raising the quality of supervision and control of the insurance sector, by integrating a digital supervision platform for the insurance sector with the Central Bank’s systems, with the aim of preparing reports and central analysis, while insurance companies made progress during the year 2022 in terms of applying internal controls to the process of preparing financial reports. To improve the quality of financial reporting in this sector.

In the area of countering money laundering and combating the financing of terrorism, the Central Bank continued to take strict measures, with a continued focus on deficiencies in its anti-money laundering compliance frameworks, imposing financial and administrative penalties in compliance with the guidelines issued by the Financial Action Task Force (FATF), and issued guidance on Dealing with the risks of crypto assets.

Among the most important developments undertaken by the Central Bank is the modernization of the monetary framework for the dirham according to a roadmap approved by the Board of Directors to enhance the implementation of monetary policy in line with international standards. This included facilitating the provision of emergency liquidity against high-quality collateral, launching a comprehensive forecasting tool, and improving transparency in day-to-day cash operations.
In the field of consumer protection, the Central Bank began implementing regulations based on the principles and standards of consumer protection during the year 2022, as a means of defining control procedures regarding disclosure and supervision of products, market behavior, indebtedness and privacy.
The report added that the Central Bank updated its real estate lending framework by applying new standards for the level of exposure of banks to risks, which led to facilitating mechanisms for monitoring and supervising the sixth most important non-oil sector in the state’s economy. The Central Bank intends to move to full implementation of these standards in the medium term.

In the field of digital transformation, the report indicated that the Board of Directors of the Central Bank approved a comprehensive digital transformation strategy during the year 2022, which is keen on using modern technologies in the supervisory and control fields, data processing and storage, indicating that this approach enhances the ability of the Central Bank to provide a safe and effective infrastructure for payments. digital.

His Excellency Khaled Mohamed Balama, Governor of the Central Bank of the UAE, said – on this occasion -: “We are proud of what we have achieved during the year 2022 in terms of achievements that support and strengthen our position among the best central banks in the world, and in a way that contributes to enhancing monetary and financial stability.”