Receiving the results of a coronavirus test can take anywhere between a few minutes and several days, depending on the method and the capacity of those doing the testing. Diagnosing the damage the virus has wrought on the global economy, however, is a much more time-consuming affair.
Since the damage began to unfold with a string of border closures and lockdowns earlier this year, the Organisation for Economic Co-operation and Development, a grouping of developed economies, has been gathering the data for its own assessment. The diagnosis is in and the results are not good.
“This is the most uncertain and dramatic outlook since the creation of the OECD,” said Laurence Boone, its chief economist, on Tuesday.
Even if the force of the pandemic continues to ease, the global economy is expected to contract by six per cent this year. Should a second wave of infections lead to fresh lockdowns, the contraction could be as much as 7.6 per cent.
In economics, as in medicine, it is sometimes good to get a second opinion. The World Bank and the International Monetary Fund have released their own forecasts, predicting contractions of 5.2 per cent and three per cent, respectively, though both organisations have warned that uncertainty remains.
Beneath these global outlooks, however, lie diverse national narratives. Not all countries have managed to curb their coronavirus infection rates equally, and this will be reflected in their economic prospects.
The UK, which in all likelihood has suffered the highest number of confirmed coronavirus infections and deaths in Europe, is expected to see 2020 economic output decline by 11.5 per cent, according to the OECD. South Korea, which has become a renowned example for pandemic response, will experience a contraction of just 1.2 per cent.
The relationship between pandemic response and economic prospects paints a relatively hopeful picture for the UAE, which has achieved one of the highest levels of testing and lowest numbers of coronavirus deaths per capita of any wealthy country.
No country will avoid a contraction this year, and many people in the UAE have been affected by the pandemic. In a recent interview with The National, Ali Matar, the head of the EMEA region for LinkedIn, an employment-oriented social networking platform, noted that hiring in the UAE fell by 60 per cent at the end of April.
But there is widespread agreement in global policy circles and financial markets that the Emirates will see the pandemic through with uncommon economic resilience.
On Wednesday, Moody's, a global credit ratings agency, affirmed a stable outlook for the UAE, with a credit rating of Aa2 – among the top tier. The distinction is all the more significant in light of the prolonged downturn in oil prices, given the prominence of hydrocarbons in the Emirati economy.
Nonetheless, the significance of the country’s remaining reserves, its continued implementation of a vision for diversification and the wide array of jobs under development in future-oriented sectors all point to a stable outlook. It is little wonder that Mr Matar notes that UAE job postings in software and IT services – particularly cybersecurity – along with health care and remote-services work, continue to rise.
It remains to be seen to what extent OECD figures bear out, and whether a second wave of infections will dampen economic prospects by the end of the year. And while there is no vaccine to the impending downturn, economies have a built-in resilience. The damage could be severe, but with a degree of adaptation, recovery is certain.
UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
MATCH INFO
Euro 2020 qualifier
Ukraine 2 (Yaremchuk 06', Yarmolenko 27')
Portugal 1 (Ronaldo 72' pen)
Meydan race card
6pm Dubai Trophy – Conditions(TB) $100,000 (Turf) 1,200m
6.35Dubai Trophy – Conditions(TB) $100,000 (Turf) 1,200m
1,800m
7.10pm Jumeirah Derby Trial – Conditions (TB) $60,000 (T)
1,800m ,400m
7.45pm Al Rashidiya – Group 2 (TB) $180,000 (T) 1,800m
8.20pm Al Fahidi Fort – Group 2 (TB) $180,000 (T) 1,400m
8.55pm Dubawi Stakes – Group 3 (TB) $150,000 (D) 1,200m
9.30pm Aliyah – Rated Conditions (TB) $80,000 (D) 2,000m
The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
The years Ramadan fell in May
