By Andy Sambidge
Citi's Mideast economic chief says construction, real estate sector to remain depressed.
Dubai is likely to see GDP growth returning in 2010 despite continued concerns about the emirate's construction and real estate sectors, Citi said in a report on Tuesday.
Despite a continued significant fall in investment in the medium term, Farouk Soussa, Citi's chief economist for the Middle East, said he saw GDP growth increasing steadily to more than six percent by 2012.
Soussa added that the main beneficiaries of this growth would likely be sectors related to external demand such as tourism, trade, logistics, transportation, and to domestic consumption like retail and utilities.
"We believe it [the impact of the global downturn on Dubai] is likely to have been significant, and that the collapse in the real estate sector and resolution of the debt overhang will be a drag on growth in the future through a reduction in investment and knock-on effects to consumption," Soussa added.
The Citi report said the fall in investment would continue to depress the local construction industry, adding it would put "a premium on local developers and construction companies to diversify their activities in other markets".
Soussa added in the report that the debt issues connected to Dubai World would likely impact the domestic banking sector’s profitability, and depress local financial services.
Interesting, some positive news about Dubai and you have to look with a microscope to find it on Arabian Business. Guess the news is no negative enough and you're keeping the front page available for the next report by Saud "Dr Doom" Masud?