x Abu Dhabi, UAESaturday 22 July 2017

Dubai trade robust despite global ills

Dubai's trade is tipped to surge 20 per cent this year as the emirate shrugs off concerns linked to cooling growth in Asia and the euro-zone debt crisis.

Dubai has already cemented its place as one of the leading trading centres in the emerging world, alongside Singapore and Hong Kong. Pawan Singh / The National
Dubai has already cemented its place as one of the leading trading centres in the emerging world, alongside Singapore and Hong Kong. Pawan Singh / The National

Dubai's trade is tipped to surge 20 per cent this year as the emirate shrugs off concerns linked to cooling growth in Asia and the euro-zone debt crisis.

The indication comes after trade grew 22 per cent last year to a record Dh1.1 trillion (US$299 billion) from Dh902 billion the year before, Dubai Customs said yesterday.

"What we have noticed from the past five years is that even if economies are down in other countries, Dubai's trade has still exceeded our target. Figures for the first quarter have already exceeded our target," Ahmed Butti Ahmed, the director general of Dubai Customs, said yesterday.

Dubai has already cemented its place as one of the leading trading centres in the emerging world, alongside Singapore and Hong Kong. Imports, exports and re-exportsare a major driver of the emirate's economy.

Imports into Dubai rose 21 per cent to Dh442bn last year from Dh364bn in 2010. Exports rose to Dh98bn, up 44 per cent from Dh68bn. Re-exports climbed 18 per cent from Dh144bn to Dh161bn.

A diversifying of the emirate's trade links enabled Dubai to steer clear of choppy economic conditions and turmoil in the region, said Mr Ahmed.

India was Dubai's most valuable trade partner, accounting for almost a fifth of overall trade. Trade with the country reached Dh206bn, with imports representing almost half that amount.

China was the emirate's second-biggest trading partner, with imports from the country to Dubai reaching Dh100bn. The United States was the emirate's third-biggest trading partner.

Dubai's direct trade with the GCC also grew by 28 per cent to Dh28.4bn.

Similarly, trade with Iran, traditionally one of the emirate's major trading partners, rose from Dh27bn in 2010 to Dh36bn last year; Dh31bn of the total was re-exports.

But Mr Ahmed said Dubai Customs was concerned about trade with Iran slowing.

"We have had complaints from a lot of traders about the drop in the Iranian currency against the US dollar, so it's not viable for certain commodities to be sold," he said.

Under pressure from sanctions and a weakening economy, Iran's currency has plummeted by as much as half against the dirham. As a result, traders in the emirate were owed more than Dh1bn by buyers in Iran, said Morteza Masoumzadeh, a member of the executive committee of the Iranian Business Council in the emirate, last month.

But Mr Ahmed said he was less worried about other challenges in the global economy, such as slowing growth in other trading partners.

The IMF expects India's economic growth to slow to about 7 per cent this year and next, down from 8.4 per cent in the past two years. China's economy expanded at an annual rate of 8.1 per cent in the first quarter, its slowest pace in almost three years.

The euro zone, a market for UAE goods, and the onward flow of exports is expected to remain below previous growth levels.

"The global climate is very challenging and Asian markets are seeing growth but not as strong as last year," said Liz Martins, a senior economist in the region at HSBC.

Gold was the most valuable export from Dubai, accounting for Dh62bn of exports. It also topped the list of imports, with Dh81bn of the metal flowing into Dubai. The top re-export item was diamonds at a value of Dh63bn.

tarnold@thenational.ae

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