Monday, February 09, 2009

Dubai economy forecasts 2.9% growth this year

Dubai's economy is bound to grow 2.5% this year, despite the global slow down, declared a senior official at the Dubai Government, yesterday.

The Chief Economist of Dubai Government, Raed Safadi, said that a 2.5% growth is likely in Dubai in 2009, although it is quite less when compared to the 8% growth in 2008.

Dubai has had to revise the forecast downward, since October, as it is known that none of the emirates are immune to global financial turmoil. Dubai continues to focus on retention of human capital, with the emirate issuing nearly 1000 visas per day in January.

Safadi said that Dubai's economy used leverage to improve its production and infrastructure capacity, and added that while enjoying six years of current surplus, Dubai was also ready for the worst, when it was growing.

"We are being challenged on exports, and also in the real estate sector, construction and of-course, tourism. All these sectors are under pressure here," Safadi continued.

During 2007, the Dubai Government aimed to grow 11 percent each year, until 2015. This target was reduced to 4-6 percent, this year. Standard Chartered further reduced the growth forecast of UAE to 0.5% last month.

The Director of IMF-Middle East and Central Asia, Masood Ahmed, however, mentioned that GCC can expect an economic growth of 3.6 percent this year, from the 6.3% growth last year. Although, he did not mention individual figures for UAE or Dubai, he said that for the oil exporters, the drop in oil prices and Opec production cuts will reduces oil exports by nearly 50% in 2009, thereby leading to loss of government revenue worth Dh.1.1trillion.

However, increased government spending may help to strengthen the Gulf economies, Ahmed pointed out.

The IMF has revised its forecasts several times during the past six months. This is because, no crisis in history has been so severe, and the economic models for forecasts have not worked well, Ahmed said.

1 comment:

WebJunky said...

we all know how manipulated these figures can be - it is just the nature of jounalism in dubai. that said, 2.9% may have some credibility to it seeing as the US is still forecasting minimal growth however in practicality things are getting worst by the day. little manipulation to the formula or facts (or both) can swing this number significantly. beware....do you trust your source?