UAE extends coronavirus stimulus package to end-June 2022
Move designed to continue supporting sectors negatively impacted by Covid-19 pandemic – Original Source, ArabianBusiness
The Central Bank of the UAE (CBUAE) has announced the extension of its economic stimulus package – the Targeted Economic Support Scheme (TESS) – until the end of June next year.
The scheme was initially launched by the CBUAE in March, as part of a AED100 billion initiative, to support the UAE’s economy during the Covid-19 pandemic, through a range of integrated relief measures to the banking sector related to funding, liquidity, lending and capital.
According to a statement on Tuesday, financial institutions will continue to be eligible to access the collatoralised AED50 billion zero-cost liquidity facility up to the end of June 2022 “to provide new loans and financing to individuals, small and medium-sized enterprises, and other private corporates affected by Covid-19 repercussions”.
CBUAE’s financing for loan deferrals under the TESS will also be extended until the end of 2021, while the outstanding financing for the TESS deferrals will be fully phased out by December 31.
Khaled Mohamed Balama, governor of the Central Bank of the UAE, said: “The extension of the TESS shall allow continued support by the financial system to the sectors negatively affected by the Covid-19 pandemic. This is done to support the recovery phase, in line with the CBUAE mandate to ensure financial and monetary stability.”
In its latest World Economic Outlook report published earlier this month, the International Monetary Fund (IMF) increased the UAE’s economic growth forecast for 2021 to 3.1 percent, in what was seen as a credit to the country’s positive handling of coronavirus.
While the forecast is up from the 1.2 percent forecasted in October last year, it is expected to soften in 2022, dropping down to 2.6 and stabilising through to 2026, according to the IMF report.