Upbeat Dubai set for 4.5% growth

DUBAI — Economic activity in Dubai is gaining new momentum amid rising optimism as the emirate targets over 4.5 per cent growth in gross domestic product in 2012, Shaikh Ahmed bin Saeed Al Maktoum, the head of the Dubai Economic Sector Committee, said on Wednesday.

Dubai’s economy witnessed a growth of 2.5 per cent in 2010 and it is expected to increase over three per cent in the year 2011. “We hope to see a further growth this year to 4.5 per cent,” Shaikh Ahmed, who is also President of Dubai Civil Aviation and Chairman and CEO of Emirates Group, said during a presentation at the Dubai Economic Outlook Forum.

He said in spite of the difficulties Dubai had experienced, particularly in 2009 and early 2010, its strategy of creating new opportunities through diversification has succeeded in bringing about economic prosperity and stability. “Economic activity and prosperity in Dubai have traditionally been centred on the trade, logistics and tourism sectors. We see these sectors firmly in the driving seat once again, supported by an unrivalled infrastructure, global enterprises and growing reputation as an international destination,” Shaikh Ahmed said.

Combined, trade, logistics, transportation and tourism accounted for almost 60 per cent of Dubai’s GDP in 2011.

“As you well know, these sectors have recently experienced vigorous growth, as demonstrated by the buoyancy in tourism and hospitality and the substantial increase in passenger traffic through Dubai International Airport in 2010 and 2011. The financial sector in Dubai has also remained resilient and robust, in spite of the real estate lending challenges,” he said.

Shaikh Ahmed said Dubai had been confronted with challenges “due to a combination of unfavourable international developments and the legacy of high growth objectives, but we have been standing up to those challenges successfully”.

Dubai’s government-related entities have once again exhibited strong determination and ability to service debt obligations, he pointed out. “We have seen ratings upgrades reflecting strong internal revenue generation,” Shaikh Ahmed said.

He said Dubai has rationalised the use of public funds and set tighter budget controls for 2012 “as a part of its overall prudential approach in managing public finance”.

Shaikh Ahmed said the government would continue to support government-related entities. Asked if the Dubai Financial Support Fund, created in 2009 to help Dubai entities, would need to be replenished after it was used to support state-linked firms, Shaikh Ahmed replied: “I am very happy with the way business is going in every aspect.” On the prospects of new bond issues this year, he said if there were a need, new issuances would be considered.

He said a strong focus on economic diversification and enabling growth has been the cornerstones of Dubai’s economic policy ever since a visionary leadership took control of shaping the emirate’s destiny in the past millennium. “Continuing engagement and consultation between the public and private sectors along the way forward is essential to evaluate prospects, identify and plug gaps, promote transparency and create an environment that enables and sustains growth,” he said.

“While the global economy is in transition, Dubai is ushering in a series of changes, new economic policies as well as innovative strategies. These changes, along with our fundamental economic strengths, will allow Dubai to play a greater role in global economy while as well achieving our objective of sustainable growth and development,” Sami Al Qamzi, Director General of the Department of Economic Development, said at the Dubai Economic Outlook Forum.

Hamad Buamim, Director General, Dubai Chamber of Commerce and Industry, said Dubai’s trade outlook remained upbeat with the average expectation rating of the sector set to improve to 5.8 in 2012 from 5.7 in 2011.

Jamal Majid bin Thaniah, vice-chairman of DP World, said with a projected gross domestic product growth of 3.8 per cent and an inflation of 2.1 per cent in 2012, the UAE would see its exports surging to $276.1 billion, imports growing to $219 billion and external debts swelling to $170 billion this year.

Thaniah said Dubai’s non-oil trade exceeded Dh814 billion at the end of the third quarter 2011, up 23 per cent over the same period in 2010.

issacjohn@khaleejtimes.com

• UAE