Dubai's economic growth will accelerate in 2019 and 2020
Dubai - Government initiatives continue to support economic expansion in the emirate
Dubai's economic growth will accelerate in 2019 and 2020, with tourism, logistics, transport, wholesale and retail sectors replacing the real estate as main growth driver next year, official data showed.
Data released by Dubai Economy on Sunday showed that Dubai's GDP grew 1.94 per cent last year but it will pick up to 2.1 per cent this year and 3.8 per cent next year before easing to 2.8 per cent in 2021.
The emirate's economy will continue to rely on real estate as its main growth driver at 3.65 per cent for 2019 followed by 3.1 per cent for logistics and transport; 2.8 per cent growth in tourism; 2.4 per cent in financial services and 1.9 per cent in wholesale and retail trade.
But as tourists will flock into the emirate next year for Expo 2020, tourism sector will overtake real estate to become a top growth driver of the economy followed by logistics and transport; wholesale and retail; real estate; financial services; industrial and construction industries.
Dubai Economy said government-led policy initiatives and investments, improved growth prospects in trading partners, and preparation to host Expo 2020 are providing the bedrock for increased private sector credit and investment in Dubai.
"Next year's growth is all about Expo 2020 that will boost tourism, food and beverages, and hospitality during October, November and December," said Raed Safadi, chief economist at Dubai's Department of Economic Development.
Safadi sees foreign direct investment flows into the emirate also accelerate in coming years.
"Our drive and focus is to open new markets and products for exports, taking advantage of new connectivity through maritime and air. Looking at the global picture, Dubai's economic growth will pick considering trade and economies of our major trading partners will also grow," added Safadi.
He pointed out Dubai surmounted challenges and achieved strong growth in FDI last year despite decline in global investments.
"Now trend is moving positively globally and we hope that clouds of uncertainty over global economy will dissipate and the emirate will fare even better," he added.
In 2018, Dubai attracted Dh38.5 billion in foreign direct investment, a growth of 41 per cent year-on-year. Also, the start of 2019 has seen business activity picking up as more than 6,700 new business licences were issued, an increase of 29 per cent year-on-year; and Dubai Financial Market attracting Dh680 million in net foreign investment.
Sangeetha Nahar, executive member of The Institute of Chartered Accountants of India - Dubai chapter, attributed good growth of the emirate to its flexible legislation that offer the best environment for international investment and exceptional talent.
"Dubai already enjoys an extremely diversified economy with its GDP contribution coming in from 20 sectors. Expo 2020 has spurred massive investment and infrastructure development in the emirate to accommodate 20 million visitors expected during the six-month long event. This would definitely lead to a positive impact in all existing sectors. Dubai Expo is a strong magnet to attract and turn the short-term opportunities into long-term lucrative business investments," said Nahar.
A recent study released by EY had forecast that Dubai Expo will add Dh122.6 billion to the emirate's economy during 2013-2030.
Going forward, Dubai Economy said the emirate is currently engaged in developing new growth drivers and initiatives to attract private sector investments in new innovative sectors and expand to regional and global markets.