x Abu Dhabi, UAEWednesday 24 January 2018

Bright economic picture painted for Dubai

Dubai's economy is on a firm growth path, agree participants in a government-organised seminar aimed at showing more transparency.

Shoppers at Deira City Center in Dubai.
Shoppers at Deira City Center in Dubai.

The Dubai economy is expected to accelerate by about 4 per cent this year, bolstered by improving trade and the lack of unrest that has troubled other parts of the region.

"Dubai is a safe haven from vulnerability," Dr Nasser Saidi, the chief economist of the Dubai International Financial Centre, said yesterday at the Dubai Economic Outlook 2011 seminar.

Dubai World's final US$24.9 billion (Dh91.45bn) debt restructuring agreement last week was a significant positive for the economy.

Surging demand for Dubai's exports have helped to resuscitate growth since the global financial downturn.

Strong appetite in the emirate's main export markets of India and, to a lesser extent, Iran will help to sustain the economy in the future, said Mohammad Lahouel, the chief economist of the Dubai Department of Economic Development.

"Growth in trade and services are likely to be the most important drivers of growth in 2011 and beyond," Mr Lahouel said.

Sheikh Ahmed bin Saeed Al Maktoum, the chairman of the Dubai Economic Sector Committee and chief executive of Emirates Group, said: "We are witnessing logistics, retail, trade and tourism leading economic activity in Dubai, reinforcing their legacy as the chief engines and enablers of growth."

Signs are already suggesting the country's economy is attracting an influx of foreign funds, diverted by troubles elsewhere in the Middle East.

"There will be winners and losers, and I think Dubai, Abu Dhabi and Qatar will be winners," said Marios Maratheftis, the head of western hemisphere research for Standard Chartered.

Mr Maratheftis said fears of investors indiscriminately withdrawing funds from everywhere in the region had proved unfounded.

Enquiries to Foreign Direct Investment (FDI) Dubai, the emirate's foreign investment office, had shot up 30 per cent this year so far compared with the same period last year, the FDI Dubai chief executive Fahad al Gergawi said.

FDI Dubai will announce in a few months the names of logistics, clean-technology and service companies planning to establish in the emirate, Mr al Gergawi said.

Dubai's economy would expand by 4.7 per cent this year before accelerating to 6.3 per cent next year, said Farouk Soussa, the chief regional economist of Citibank.

The impact of the global financial crisis dragged the economy into a recession in 2009 before a recovery took hold last year. But despite brightening prospects, challenges remain.

Excessive supply in the property market means the outlook for the sector remains uncertain, and a number of companies still have exposure to it through investments.

Although rising oil prices are a boon for regional fiscal finances, they pose another risk to Dubai.

"High oil prices have the risk of disturbing the global economy, and as a result Dubai's economy," said Mr Soussa.

Yesterday's seminar was the first of what officials hope will be an annual event organised by the DED. Senior government figures and private-sector business people were among those attending.

"We firmly believe that open and frank discussions can make better decision making in the private sector and better policymaking in the public sector," said Sami al Qamzi, the director general of DED.