The economy of the UAE will suffer a deeper contraction this year than first estimated, dragged down by disruptions caused by the coronavirus pandemic, according to the country’s central bank.

Gross domestic product will shrink 5.2 percent in 2020, compared with a previous forecast for a decline of 3.6 percent, the central bank said in its quarterly review on Wednesday.

GDP in the Arab world’s second-largest economy dropped an estimated 7.8 percent last quarter after a 0.8 percent contraction in the prior three months, it said.

“As a regional trade, tourism and transportation hub, the UAE economy was hit by the general ban on travel, while manufacturing production shrunk due to supply chain disruptions, limited export opportunities and subdued domestic demand,” the central bank said.

The outlook is slightly worse than forecasts compiled by Blomberg, which see a decline of 5.1 percent this year. The UAE economy last contracted by over 5 percent in 2009, according to the International Monetary Fund.

The central bank also said that non-oil GDP shrank an estimated 9.3 percent in the second quarter, compared with a 2.7 percent drop in the previous quarter, while for the full year, the non-oil economy is projected to contract 4.5 percent because of the outbreak.

Forecasts assume an increase in government spending that will average close to 28 percent in 2020, the central bank noted, adding that it expects to see a recovery in employment levels.