Dubai economy likely to grow at faster pace
Infrastructure investment and government spending will drive growth
A strong uptick in the travel and tourism sector supported by projections of a hike in infrastructure investment and government spending bode well for Dubai, economists and analysts said.
"Overall, we expect Dubai's economy to grow at a slightly faster rate this year, underpinned by infrastructure investment and government spending," Khatija Haque, head of Mena research at Emirates NBD, said.
"The PMI survey data for February continued to show solid growth in Dubai's economy, with the travel and tourism sector performing particularly well after a relatively soft fourth quarter in 2017," Haque said.
According to Helal Saeed Almarri, director-general of Dubai Tourism, the hotel industry remains at the forefront of cross-sector efforts to drive tourism growth, as Dubai works towards realising its Tourism Vision and 2020 goals.
"Dubai is the most globally competitive in providing visitors the optimal range of options that cater to their preferences across the spectrum of hospitality offerings," Almarri said.
The Emirates NBD survey report said a strong and robust expansion in business activity was a key factor behind the latest improvement in operating conditions in Dubai's non-oil private sector. The rate of growth was sharp overall, despite softening fractionally since the preceding survey.
"Following moderate job creation at the beginning of 2018, no change was reported in employment levels during February. The finding thereby ended an 11-month streak of rising payroll numbers. Job shedding was registered in the travel and tourism and construction sectors, while growth was seen among wholesale and retail firms," said the report.
The bank's survey report said inflows of new business accelerated at the fastest pace since August last year. Furthermore, the rate of growth was sharp overall, with the steepest rise in new work seen in the travel and tourism sector. Many firms noted strong demand from both domestic and foreign sources.
Economists at FocusEconomics expect tourism growth will likely remain robust, particularly in Dubai as the city prepares for the 2020 World Expo.
A Knight Frank report said in the next 10 years, Dubai is set to record one of the fastest growth among hub cities on the back of heavy infrastructure investments.
Third best in the world
"To support the sector's growth, Dubai has invested heavily in transport and infrastructure improvements over these years, which as a result is now ranked the third best in the world," Knight Frank said.
"Aggregate demand will be boosted by an additional Dh15 billion expected to be spent on roads and transport for Expo 2020 in government projects. The Dubai budget for 2018 has allocated Dh5 billion for 2018 and an equal amount for 2019 too," Knight Frank.
Dubai Industrial Strategy 2030 has identified 6 industrial sectors to spearhead its economic transformation: aviation, maritime, pharmaceutical and medical equipment, aluminum and metallurgy, machinery and equipment, and consumer goods.
The Dubai economy is projected to grow 3.5 per cent in 2018, thanks to diversification and the positive impact of global trends, according to 'Dubai Economic Outlook' report.
It has identified a number of key factors influencing the future of growth in Dubai in the coming period. The most important of these are the hosting of Expo 2020, the implementation of the Dubai Industrial Strategy 2030 and the Dubai 2021 Plan.
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