Trade grows to more than $88bn in first three months despite decline in business with Iran
Dubai's non-oil trade jumped 16 percent in the first quarter and recovery in the emirate's property sector will help keep the pace up this year despite a plunge in trade with Iran and global economic weakness, the Dubai customs head has said.
"This year up to this quarter, we reached an approximately 16 percent growth in trade," Ahmed Butti Ahmed, director general of Dubai Customs, told Reuters in an interview.
Non-oil trade grew to AED325.5bn ($88.6bn) in the first quarter from AED280bn in the same period last year, the customs office said. A more detailed data breakdown was not immediately available.
"The main thing now is that growth in real estate starts picking up. With real estate developments there are many sectors that also start picking up," he said on the sidelines of a world customs conference in the coastal desert city.
Developers in Dubai, one of seven United Arab Emirates, are dusting off stalled building plans, encouraged by an economic recovery after a 50 percent drop in house prices from the 2008 peak triggered a series of debt restructurings in state firms.
Trade expanded 13 percent to AED1.235trn, after a record 22 percent jump in 2011.
Growth in Dubai's total non-oil trade slowed in 2012 partly due to a drop in business with Iran, as Western sanctions against Tehran's disputed nuclear programme took toll.
The vast majority of trade between Iran and the Gulf Arab states flows through Dubai, long a major commercial hub for Tehran, but banks in Dubai cut back their Iran-related dealings after the United States imposed tough sanctions in late 2011.
Trade between the two was roughly AED25bn last year, down about 31 percent from 2011, customs said in March.
Ahmed said trade with Iran had tumbled recently for many reasons, although he gave no specific figures.
"The embargo on one side, the other side is that the Iranian currency ... became very (weak) so it has become a little bit more expensive for them. But overall there is growth (in Dubai total trade). That's what counts for us," he said.
Asked if he expected Dubai's first quarter trade growth to be sustained in the rest of the year despite sluggish global economic growth and the drop in Iran trade, Ahmed said: "Yes because people are very optimistic."
"We see a lot of investors putting their investments into real business because nowadays banks will not give you that much interest so they prefer to invest it into trade, goods. That's where they can get a better return on their money."
Non-oil business activity in the UAE, the world's No. 3 crude exporter, has been holding up well in recent months. But growth in new export orders dropped sharply in April, a purchasing managers survey showed this month.