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Home / Features / Dubai economy continues to show growing buoyancy despite challenges

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Dubai economy continues to show growing buoyancy despite challenges

The Emirate of Dubai continues to show growing levels of buoyancy in different business sectors, boasting growing demand and increasing returns thanks to its highly sophisticated industrial base and rising foreign investment quotas for its property and financial markets. The impressive economic success story, according to recent business reports, is attributed to a number of factors, primarily well-thought out planning that carefully takes into consideration recovery and deceleration circumstances, application of best practices and optimum utilisation of resources.

Citing real estate and financial reports, Al Hayat, a Saudi-based daily pan-Arab newspaper, recently said that the real estate sector in Dubai is enjoying high demand thanks to the sound, comprehensive plans devised by the government of the emirate to accommodate growing business demands and challenges associated with the fast-paced developments taking place regionally and worldwide.

The Dubai economy managed to attract AED403 billion worth of direct and indirect foreign investments during 2016. Wholesale and retail trade transactions accounted for the largest part of these investments followed by the financial sector in the second position, with real estate coming in third, according to the paper.

A strong recovery was recorded on the trade, tourism and construction platforms by the emirate’s private sector, as revealed by Dubai market data at the end of December 2016. This is attributed to growing production, business and employment activities and exceptional performance in the construction sector which played a fundamental role in propelling the economy to a reasonable level. The paper cited high free cash flow levels amounting to AED295 billion worth of property deals in 2016, of which, sales accounted for AED103 billion, and 134 private sector projects valued at around AED100 billion.

The paper attributed the pressures and challenges experienced by the UAE property market last year to weak oil prices and geopolitical developments.

Large-scale infrastructure, road and transport projects valued at AED20 billion will be executed over the coming years, including those associated with EXPO 2020 Dubai, added the paper, citing recent business data. This economic boom is likely to boost business competitiveness and enhance the emirate’s ability to attract global companies specialising in high-end smart technologies.

Dubai has managed to strengthen its position as a global business centre thanks to the government’s economic diversification plans and efforts to streamline export regulations, the report added.

The emirate abounds in developmental projects in addition to innovation-based enterprises that are likely to generate plenty of investment and development opportunities over the coming years, with available data estimating the total value of 2017’s property projects at more than AED100bn. These projects include EXPO 2020 Dubai enterprises, Dubai South, and Al Maktoum International Airport at Dubai World Central, in addition to a number of tourism enterprises, the latest of which is the launch of the Dubai Harbour Project, the Middle East region’s largest marina which is slated to feature a cruise ship port with a terminal capacity of 6,000 passengers.

With regards to the knowledge-based economy projects launched by the emirate, the report cited the Museum of the Future, a unique initiative by the Government of Dubai that explores the future of science, technology and innovation, and is therefore expected to turn Dubai to a regional and global hub for development of sciences. The Mall of the World is a project to build the largest shopping centre of its kind in the world, which envisions a fully air conditioned city, comprising more than 4,500,000 square meters and capable of receiving around 180 million visitors annually. Dubai Water Canal is another major enterprise to create unlimited tourist investment opportunities, including hotels, restaurants and entertainment facilities.

Remarkable progress is being achieved by the emirate as well in terms of implementing sustainable power and water generating projects that are likely to produce high-yield financial savings amounting to AED60bn by the year 2030.

The paper highlighted the positive impact of the current competition running between the GCC markets where efforts are tirelessly being made to improve the investment environment by launching 'mega' infrastructure projects worth billions of Dirhams and developing business-friendly legislation to attract local and international investments in addition to the current endeavours to privatise state-run companies and assets.

The report underlined the positive impact of privatisation on the region’s economy in terms of mitigating financial risks and offsetting budget deficits in some sectors.

The paper concluded by saying that the economic boom witnessed by Dubai is attributed to its ability to attract and adopt innovative business concepts that generate positive returns under all circumstances.

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