Dubai posts 2.2% growth

DUBAI — Dubai’s economy is expected to have grown by around 2.2 per cent in real terms last year, emerging from a similar contraction in the previous year, the Arab emirate’s statistics office said on Sunday.

By (Reuters)

Published: Mon 21 Mar 2011, 11:26 PM

Last updated: Tue 7 Apr 2015, 5:00 AM

The global financial crisis shelved projects worth billions of dollars in Dubai. Its economy was further hit by debt troubles in state-owned firms last year.

But recovery in trade flows and tourism was seen helping lift 2010 growth of the oil-wealth lacking emirate, which accounts for almost a third of the UAE’s gross domestic product.

“The GDP for the first nine months of 2010 increased by 2.4 per cent and Dubai Statistics Centre expects that the GDP for the whole year will increase by around 2.2 per cent,” it told Reuters in an e-mail.

The statistics office head said in February that Dubai’s economy grew 2.5 per cent year-on-year in the first nine months of 2010.

Earlier on Sunday, its data showed that Dubai’s real GDP contracted by 2.4 per cent in 2009, more than expected, due to a plunge in property and construction sectors. It expanded by 3.2 per cent in the oil and property boom year of 2008.

The International Monetary Fund forecast the emirate’s real gross domestic product to have shrunk by 0.9 per cent in 2009 and predicted a 0.5 per cent growth for 2010. Dubai’s nominal gross domestic product fell 14.2 per cent to Dh294.2 billion ($80 billion) in 2009, the data showed.

In 2009, the construction sector shrank by 19.5 per cent in real terms, while the real estate and business sectors plunged by 19.8 per cent. Both sectors account for about a quarter of Dubai’s economy.

“Since 2009 there was a bounce in activity with recovery in the global economy and the removal of some of the uncertainties around some of the Dubai debt issues,” said Giyas Gokkent, chief economist at the National Bank of Abu Dhabi.

“When you look at Dubai, tourism, aviation and logistics are doing well ... The bit that is not doing so well is real estate and any activity around that,” he said.

The economic output of the whole UAE, the world’s third largest crude exporter, is expected to grow by 3.4 per cent this year as oil prices hold above $100 per barrel, fuelled by political turmoil in the Arab world, a Reuters poll showed last week.

Dubai’s GDP growth alone is forecast to quicken to 2.8 per cent in 2011, the IMF said in March. —