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Abu Dhabi, UAETuesday 19 June 2018

Dubai businesses upbeat as confidence improves

Brighter global economic prospects, coupled with strengthening oil prices and improvement in global trade, are boosting sentiment, DED survey finds

Burj Al Arab in Dubai is one of the Dubai hotels offering discounts on room rates this Eid Al Fitr weekend. Giuseppe Cacace / AFP
Burj Al Arab in Dubai is one of the Dubai hotels offering discounts on room rates this Eid Al Fitr weekend. Giuseppe Cacace / AFP

Economic conditions in Dubai improved in the first quarter year-on-year and also over the last quarter of 2017, according to the latest business confidence survey by the Department of Economic Development (DED).

The Composite Business Confidence Index improved by 5.5 points after registering 116.7 points in the January to March period, up 111.2 points during the same quarter of 2017. DED said the outlook for Q2 2018 appears to be even more promising as businesses are anticipating better outcomes on revenues, sales volumes, profits and new orders.

Brighter global economic prospects, coupled with strengthening oil prices and improvement in global trade, are supplementing Dubai’s continued investment in infrastructure, diversification and economic transformation to a knowledge-based economy. These developments have resulted in better returns on investment and are contributing to an expected pickup in growth from 2.8 per cent in 2017 in real terms to an anticipated 3.5 per cent in 2018, the survey showed.

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In April, the World Bank said UAE growth will reach 3.3 per cent [up from 2 per cent in 2017] by the end of the decade. “The possible reversal of Opec-mandated production cuts after 2018, a moderate increase in projected oil prices, improved oil production capacity, and recent stabilisation policies and reforms are expected to contribute positively to the economic recovery,” it said.

Looking ahead, the continued drive to meet Expo 2020 infrastructure needs, and the recent announcements of a freeze in government fees for the next three years, plus new measures to boost investment and cut cost of doing business, are all adding to the upbeat business sentiments, DED said.

Half of the respondents expect the business situation to improve in Q2, 2018 compared to 41 per cent in the previous quarter. Competition remains the topmost challenge for firms operating in Dubai, as cited by 19 per cent of the respondents.

In the latest survey, 68 per cent of the respondents said they are preparing to upgrade technology versus 69 per cent in the last quarter of 2017 and 65 per cent in Q1 2017.