Dubai Economy Poised to Grow Faster
11/11/2013 11:00 am EST
Last week, the release of official data showed that the economy of Dubai has risen the fastest in six years, writes Tom Arnold, of The National, and even faster growth might be on the way.
Dubai's economy is on course to grow at its fastest rate in six years, underpinned by trade, tourism, and manufacturing.
It follows the release Tuesday, November 5, of official data showing GDP accelerated 4.9% to reach Dh169 billion in the first half of the year.
Growth reached 4% in the same period of last year, said Dubai Statistics Center.
The strength of expansion in hospitality and manufacturing was a surprise, according to Khatija Haque, the senior economist of Emirates NBD.
“We were expecting growth in both these sectors to moderate somewhat in 2013,” she wrote in a research note on November 5.
“These growth rates are all the more impressive, as they are calculated off a high annual base; hospitality grew nearly 17% last year, while manufacturing was up more than 13%.”
Ms. Haque wrote that the bank's GDP forecast for Dubai of 4% for this year might be too conservative.
Since languishing in a crisis linked to a property crash and a debt crisis during the years 2009 and 2010, Dubai's economy has regained momentum.
Property prices have shot up, with average apartment prices rising by 42% during the 12 months to the end of September, according to Asteco, a broker. Increasing numbers of tourists have supported demand in hotels, restaurants, and shopping centers.
Hospitality and manufacturing enjoyed the strongest growth in the first half of the year, rising 13.7 and 13.3%, respectively.
The number of hotel guests grew 11.1% to reach 5.6 million, the statistics center said. The number of rooms available increased by 4,729 to 58,950.
Wholesale and retail trade, which accounts for about 30% of the economy, grew 4.1% in the first half of the year.
Transport, storage, and communications expanded 4.9%.
Property and business services edged 3.3% higher, while construction edged up 0.4%, according to the data. Utilities expanded 4%.
Growth registered 4% last year, rather than its earlier estimate of 4.4%, the center said.
GDP expansion reached 9.2% in 2007, according to official estimates.
The center also revised upwards its GDP estimate for 2011 to 3.2%, from 3% previously.