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Dubai’s economy is all set to record the biggest expansion in five years, riding high on significant growth in tourism and trade.
The emirate’s gross domestic product (GDP) at constant prices grew 4.1 per cent during the January-June period to Dh161.5 billion, compared to 3.4 per cent growth in the same period in 2011, according to data released by the Dubai Statistics Centre (DSC) on Monday. Foreign trade, including re-exports, rose 11.4 per cent in the first half, according to calculations.
The GDP growth is seen on track to reach the government’s forecast of five per cent for the year. “Estimates show that Dubai’s economy will grow at more than four per cent in 2012,” Sami Al Qamzi, Director-General, Department of Economic Development, Dubai, had said earlier this month.
Chief engines of this exceptional growth were trade, tourism, logistics, FDI, exports and re-exports, which traditionally formed the bedrock of Dubai’s evolution into a global hub. The hotel and restaurant industry witnessed more than 16 per cent growth, while manufacturing expanded 10.4 per cent, according to the data.
“These indicators are moving towards growth because of the diversity of Dubai’s tourism product,” DSC executive director Arif Obaid Al Muhairi said in a statement.
“That helps attract more tourists, which reflects positively on demand in related activities and improves performance of the local economy,” Al Muhairi added.
Wholesale and retail businesses, which make up nearly a third of Dubai’s GDP, grew 3.8 per cent in the first six months of 2012. The real estate and business services sector rose 1.5 per cent.
Tourist arrivals in Dubai grew 10 per cent and hotel revenues 19 per cent during the first half. Altogether, five million tourists visited and stayed in Dubai during the period and another five million are expected in the second half of the year. Passenger traffic through Dubai International Airport increased 13.7 per cent. By 2015, the airport is projected to handle 75 million passengers.
Hotel guest numbers in the emirate jumped 9.6 per cent to five million in January-June, said Al Muhairi. To meet the demand of rising tourist numbers, Dubai announced two projects to further boost tourism in the emirate.
His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, this week announced plans for a development boasting the world’s biggest shopping mall and gardens larger than London’s Hyde Park, as the emirate revives property projects on hold since the start of the global financial crisis. The Dubai Financial Market General Index has climbed 18 per cent so far this year, and is headed for the biggest gain since 2007.
Earlier this month, Dubai announced a Dh2.5 billion expansion of Madinat Jumeirah and the Creek Panorama project that will be the first pedestrian bridge across Dubai Creek from Bur Dubai to Shindagha.
Al Muhairi said the Dubai’s latest plans for huge tourism and retail developments would help boost tourist numbers and contribute to economic growth.
“We see a strong growth outlook for Dubai next year, supported with a continued favourable outlook for consumption and a gradual pick-up in investment,” Monica Malik, chief economist at EFG-Hermes in Dubai, told Reuters.
“The improvement in the fiscal position and access to external funding has been vital for supporting the investment activity,” Malik said. “Moreover, the pick-up in house prices is supporting some real-estate developments that were earlier stalled.”
(c)2012 Khaleej Times (Dubai, United Arab Emirates). Distributed by MCT Information Services