Dubai economy set to grow 3.1% this year, accelerating to 3.4% in 2022

Dubai economy set to grow 3.1% this year, accelerating to 3.4% in 2022

Posted on 22 September 2021

Dubai Crown Prince Sheikh Hamdan says emirate will be an ‘even bigger global destination for investment and talent’ in the coming years

Dubai’s Department of Economic Development (DED) on Tuesday announced it expects the emirate to record a growth of 3.1 percent this year.

Spurred by the hosting of Expo 2020, Dubai’s growth is projected to accelerate to 3.4 percent in 2022, it added.

Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum (pictured below), Dubai Crown Prince and chairman of The Executive Council of Dubai said: “The bright outlook for growth in the emirate has been made possible by the vision and leadership of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, under whose guidance the government undertook decisive measures to ease the repercussions of global challenges on the economy.

“These efforts were accompanied by new legislation and amendments to the investment and residence laws in the country. Cumulatively, these moves revitalised the economy and stimulated a strong flow of local and foreign investment, allowing the emirate to resume its journey of development, diversification and sustainable economic growth.”

He added: “Over the coming years, Dubai promises to be an even bigger global destination for investment and talent and a city that offers exciting new opportunities for businesses, entrepreneurs and innovators.”

DED said it has made concerted efforts to mitigate the pandemic’s impact on businesses, especially by facilitating transaction procedures and commercial licenses.

Sami Al Qamzi, director general of Dubai Economy said: “Dubai’s latest economic indicators show that the precautionary measures, comprehensive vaccination campaigns, stimulus packages, and legislative amendments that the UAE and Dubai have adopted were right on target.

“Dubai’s economy is now firmly on the recovery path and supported by increasing business and consumer confidence. This includes in particular business activities that were most negatively impacted by the pandemic such as tourism and transport.”

In 2020, Dubai’s actual output was below its existing production capacity similarly to elsewhere in the world. Confinement measures weighed on both supply and demand that jointly led to a significant decline in economic activity, including in Dubai, despite the significant support provided by the government to firms in all sectors.

Al-Qamzi highlighted five stimulus packages launched between March 2020 and September 2021, such as the suspension and reduction of various fees, reduction of customs duties, water and electricity bills, postponing rent payment, and canceling fines.

The total financial cost of the five packages amounted to AED7.1 billion, or 1.6 percent of Dubai’s GDP. These packages came on top of economic support measures launched by the UAE Federal Government, including the Targeted Economic Support Scheme launched to ease the financial burden on firms.

DED forecasts Dubai GDP to grow by 3.1 percent in 2021, given the significant recovery beginning in Q2, particularly in the activities that witnessed an almost complete shutdown in April and May 2020.

The forecast also takes into account the expected positive impact of Expo 2020 on economic activities. It is also expected that the accommodation and food services sector will grow by 8.5 percent in 2021, compared to 2020, and transport, storage and communications by 4.1 percent.

The wholesale and retail trade sector is also expected to regain a large part of its activity following the Covid-19-induced slowdown, achieving a growth of 4.7 percent in 2021, while construction activity is likely to decline in 2021 by 2 percent.

Al Qamzi pointed out that growth is expected to accelerate in 2022 and reach 3.4 percent, driven by the continuous recovery of activities that were most affected by the pandemic, such as tourism and international transport.

SOURCE: arabianbusiness.com

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