Dubai economy buoyed by greater business optimism, FDI and new licences in 2019
Number of business permits issued in the emirate grew 35% during the first four months
Greater business optimism, increased foreign investment flows and more business licenses issued in Dubai in the first four months of 2019 signal growing investor confidence in the emirate, the Department of Economic Development said.
The number of business licences issued grew 35 per cent from January through April to 9,489, compared with the same period last year, the DED said on Saturday. The Business Confidence Index also climbed to 117.8 points in the first quarter compared to 116.4 points in the prior-year period.
"Launching modern projects that promote trade and civilisation and bring in new investment opportunities is beginning to bear fruit as evident in the number of new licenses issued by the Department of Economic Development and the accelerated growth in the emirate," said Sami Al Qamzi, director general of the DED.
The improving economic indicators come as Dubai implements a series of measures to boost the economy, attract investors and create more jobs. Its non-oil trade rose 7 per cent year-on-year in the first quarter as volumes grew and exports from the commercial hub of the Middle East climbed sharply.
The Business Confidence Index showed that companies in the manufacturing sector were the most optimistic on volumes, profits and employment in the second quarter of 2019, the DED said. In general, companies that participated in the survey said they expect more profit and higher selling prices in the second quarter.
Total FDI into the emirate more than tripled in the first quarter to Dh22.2 billion compared with Dh7.3bn in the same period last year, according to the Dubai FDI Monitor of the Dubai Investment and Development Agency.
Tourism, a key sector in the emirate's economic diversification push, grew 2.2 per cent in the first quarter from the same period a year ago to 4.75 million visitors.
Dubai's inflation rate declined 3.7 per cent in the first quarter compared to an increase of 2.2 per cent in the prior-year period when VAT was implemented.
A drop in residential property prices has helped to make Dubai more competitive, leaving surplus funds for consumers to spend on other items, the DED said.
"Though falling prices of residential units has had a negative impact on real estate revenues, this, along with a series of initiatives adopted by the government of Dubai for the benefit of citizens and residents during mid-2018 has helped boost Dubai's competitiveness and consumer spending on other goods and services," it said.
The DED said it expects no additional implications for business costs or consumer spending this year from VAT, which was implemented last year.
"The implementation of VAT and subsequently companies registering in the tax net has resulted in a new cost for small- and medium-sized enterprises," it said. "However, the cost has come down over the following year and no additional implications are foreseen on business costs or consumer spending in 2019, which is further good news for growth."
Dubai introduced a series of measures last year to reduce the cost of doing business in sectors including aviation, real estate and education.
The emirate's economy is estimated to grow 2.1 per cent in 2019 and 3.8 per cent in 2020 driven by the Expo 2020, which is expected to contribute benefits to the tourism, telecommunications, financial services, transportation, real estate and retail.
Updated: June 16, 2019 11:37 AM