‘Dubai economy poised to grow further over next two years’

DUBAI / WAM

Dubai’s economy is expected to expand further over the next two years after having outperformed global economic growth and defied downward trends that prevailed worldwide in 2016, said HH Sheikh Ahmed bin Saeed Al Maktoum, Second Deputy Chairman of the Executive Council and Chairman of Economic Development Committee.
The results of Dubai Plan 2021 Annual Report ‘Dubai Pulse’ highlight that the economic performance of the emirate is better than other economies in the region, and that Dubai’s stable macroeconomic environment, its diversification and sustainability policies, growth strategies and infrastructure initiatives continue to fuel outstanding economic performance even when the global economy faces headwinds, Sheikh Ahmed, who is also the Chairman of Dubai Civil Aviation Authority and Chairman of Emirates Group, said on Sunday.
“Diversification, resilience and sustainability are enshrined in every project, policy and strategy that Dubai adopts, including, for example, the Dubai Plan 2021, Dubai Industrial Strategy 2030, and Expo 2020. The oil sector now makes up for less than 1% of Dubai’s GDP, while varied initiatives have opened up unprecedented opportunities for global businesses in several non-oil sectors,” Sheikh Ahmed said.
Opinion polls point to strong consumer confidence in Dubai’s economy, with Dubai’s Consumer Confidence Index reaching 138 points in 2016, similar to the previous year. About 80% of the respondents rated Dubai’s economy positively during the current period. This is also in line with the respondents’ positive assessment of current job opportunities.
The Consumer Confidence Index measures consumer perceptions of the economy, their personal financial position, the desire to purchase in the local market as well as assessment of available employment opportunities. If the Consumer Confidence Index exceeds 100 points, which is the level of public neutrality, it means that consumer expectations are positive and there is an increase in optimism about the economic situation.
His Highness Sheikh Ahmed bin Saeed Al Maktoum added, “Continuous improvements in the routes, capacity, frequency, quality of service, and competitiveness of air and sea access brought 15 million overnight visitors to Dubai during 2016, up 5 percent compared to 2015. This growth is especially good compared to the 4 percent growth in global tourism, and the decline of 4 percent in the Middle East tourism sector, according to the World Tourism Organization. Large investments in travel, tourism, leisure and hospitality sectors will continue to attract more visitors, in line with our strategy to welcome 20 million visitors by 2020.”
The GCC, India, UK and Germany, the traditional source markets, account for 40 percent of Dubai’s total visitors. Average spending per visitor increased to AED8,658 in 2016 from AED 8.252 in 2015. Total spending grew by 7.6% reaching AED126 billion, while the average length of stay per visitor was 7 days.
His Highness added: “Nearly 47 contracts worth over AED11 billion are set to be awarded in 2017 for projects at the Expo 2020 site alone. The Public-Private Partnership Law passed in 2015 has further stimulated greater private sector involvement in Dubai’s construction market.”
Trade accounted for 28% of Dubai’s GDP in 2016 followed by Transportation and Storage at 12 percent and Financial Services at 11 percent. The local tourism sector grew by 11 percent in 2016, and is expected to record further growth in the coming years, growing at 5 percent and 5.1 percent in 2017 and 2018, respectively, Sheikh Ahmed explained.
The Real Estate sector is projected to grow by 4.3 percent and 3.8 percent respectively in 2017 and 2018, while the manufacturing sector is anticipated to grow by 3.3% and 4.1% this year and next, underpinned by the Dubai Industrial Strategy. “Dubai is playing a major and increasingly sophisticated role in regional and global value chains through transport, distribution, marketing services and R&D “ added Sheikh Ahmed.
Transportation Sector will also be a key driver for construction sector growth as large investment projects are moving forward, including the Etihad Rail project, the Dubai Metro extension project and the expansion of the container port in Jebel Ali capitalising on Dubai’s role as a major logistics hub between three continents and its geographical location that links major trade routes.