Dubai's exports to Italy, Spain and Greece sank by nearly a third in the first six months of the year as ripples from the euro-zone debt crisis reached the UAE's shores.
Euro debt woes start to hit Dubai exports
Dubai's exports to Italy, Spain and Greece sank by nearly a quarter in the first six months of the year as ripples from the euro-zone debt crisis reached the UAE's shores.
Exports to the debt-laden trio, the hardest hit by the turmoil, dropped to Dh670.5 million (US$182.5m), down from Dh884m in the same period last year, data released from Dubai Customs yesterday showed.
With the emirate serving as a regional conduit for trade, the data is the latest sign of how fallout from the crisis is affecting the Arabian Gulf.
"Dubai is a small, open trade-reliant economy and weak activity in the euro zone will hit the performance of its exports and the re-exports it services through its ports," said Simon Williams, the chief economist for the Middle East and North Africa at HSBC.
Dubai's exports to Italy slumped by 26 per cent from Dh701.4m in the first half of last year to Dh517.9m in the same period this year. Still, re-exports rose by 6.6 per cent to Dh449.6m.
Exports to Spain fell by 19.6 per cent from Dh149.7m to Dh120.3m. Also slipping, by 5.2 per cent, were re-exports to Dh238m.
Appetite for Dubai's exports also flagged in Greece, the epicentre of much of the euro zone's woes.
Dubai's exports to Greece slipped by 1.6 per cent to Dh32.3m during the period. Re-exports shrank by 1.7 per cent to Dh42.7m.
The value of imports to Dubai from Italy, Spain and Greece rose over the period.
As consumers and companies in the euro zone scale back spending, activity has slowed across many of the world's busiest ports. Hong Kong and Singapore have already seen export growth ease as China produces fewer clothes and spare parts for the West.
The European Union accounts for less than a third of the emirate's export market. Overall, however, Dubai's exports to the EU edged up slightly from Dh3.2 billion during the first half of last year to Dh3.7bn this year, according to Dubai Customs data. Re-exports to the 27-member nations strengthened from Dh11.3bn last year to Dh12.3bn this year.
The data suggests exporters are responding to the euro-zone turmoil by tapping new markets in the region. The flow of goods to Estonia, Bulgaria, Lithuania, Slovakia and Poland jumped sharply, Dubai Customs said. Furniture, petroleum oils, tobacco, telecommunications equipment and sunflower seeds were among the exports to those nations.
The authority did not release data for the rest of the globe. So far, Dubai's export data has not signalled any significant easing in the flow of goods.
Exports by members of Dubai Chamber of Commerce and Industry slipped by 2.4 per cent to Dh20.4m last month on an annual basis, the chamber said yesterday. The combination of Ramadan and Eid was highlighted as the main reason, the chamber said.
Mr Williams said he expected Dubai's trade model to suffer if euro-zone woes weigh further on emerging markets in Asia and elsewhere. India and China are both major trade partners of Dubai. "Dubai is an export-orientated economy for goods it produces and re-exports and if global growth weakens it will have an impact on the economy," he said.