Dubai’s economy contracted 2.5 percent last year after expanding 5.7 percent in 2008, according to preliminary government estimates in a document obtained by Bloomberg News. The Dubai Statistics Centre declined to comment on the data as economic growth rates for 2009 have not been made public yet.
Dubai and its state-owned entities, which borrowed more than $100 billion to transform the city into a global tourism, trading and services hub, suffered as international credit dried up and real estate prices plummeted by 50 percent from their peak. A slowdown in global trade also led to the contraction in the economy.
Dubai World, the state-owned holding company, has made a proposal to restructure $24.8 billion in debt.
The United Arab Emirates’ biggest investment bank, Shuaa Capital, forecast a contraction of 5 percent in Dubai last year, according to a Jan. 18 report.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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