Expo 2020’s positive impact is visible on Dubai economy

The beneficiaries are mainly consumer-related sectors, thanks to higher spending by residents and foreign visitors

Expo 2020 Dubai, the world’s largest event, began just about 10 days ago and its positive impact is already visible in almost all the spheres of life, especially among businesses in the UAE. With the onset of the six-month-long mega event, almost all the economic indicators are looking north and confidence is reaching a multi-year high. Reflecting the strong optimism, confidence among local businesses reached a 10-year high as 76 per cent of businesses in Dubai noted improved confidence in the fourth quarter of 2021, 10 per cent higher than the last quarter. Eighty-three per cent of business leaders expect an improvement in business conditions in Q4 2021, compared to 66 per cent in the previous quarter. Naturally, credit for this achievement goes to the mega event. Interestingly, the beneficiaries are mainly consumer-related sectors, thanks to higher spending by residents and foreign visitors which, in turn, will improve job prospects in the local market. With the opening up of UAE borders, foreign visitors are also emerging as a major contributor towards the rising business confidence, resulting in a pickup in spending in key sectors such as travel and tourism and hospitality.

Many businesses, especially retail majors, say that the first two weekends of Expo 2020 Dubai have seen robust sale figures. In the first 10 days since the world’s greatest show opened, Expo 2020 Dubai has seen a strong turnout of 411,768 ticketed visitors. The acknowledgement of Expo 2020’s contribution towards improved business confidence also comes from the higher echelon of the public-private sector. Growing optimism within the local business community and promising economic prospects are being created by Expo 2020 Dubai, says Hamad Buamim, president and CEO of Dubai Chamber. Increased government support for the private sector, success in overcoming Covid-related challenges, new business incentives, easing of travel restrictions and higher oil prices are among the other key factors that contribute to the positive outlook, he explains. The latest Purchasing Managers’ Index (PMI) paints no different picture for Dubai’s non-oil private sector, highlighting a considerable impact on near-term business confidence from Expo 2020. “Expo 2020 has just begun, which should drive increased sales in the services sector over the next six months at least. Whilst IHS Markit predicts that direct growth impact from the event may be modest, the latest PMI data highlighted a considerable impact on near-term business confidence,” says David Owen, an economist at IHS Markit. In a nutshell, many small and large events and conferences that will take place alongside Expo 2020 will undoubtedly lift consumer and business sentiment, helping the economy to recover faster from the pandemic.