Emirate's statistics office says real growth returned last year after a similar contraction in 2009
Dubai's economy is expected to
have grown by around 2.2 percent in real terms last year,
emerging from a similar contraction in the previous year, the
Arab emirate's statistics office said on Sunday.
The global financial crisis shelved projects worth billions
of dollars in Dubai, a trade-focused member of the United Arab
Emirates known for artificial palm-shaped islands. Its economy
was further hit by debt troubles in state-owned firms last year.
But recovery in trade flows and tourism was seen helping
lift 2010 growth of the oil-wealth lacking emirate, which
accounts for almost a third of the UAE's gross domestic product.
"The GDP for the first nine months of 2010 increased by 2.4
percent and Dubai Statistics Centre expects that the GDP for the
whole year will increase by around 2.2 percent," it told Reuters
in an e-mail.
The statistics office head said in February that Dubai's
economy grew 2.5 percent year-on-year in the first nine months
Earlier on Sunday, its data showed that Dubai's real GDP
contracted by 2.4 percent in 2009, more than expected, due to a
plunge in property and construction sectors. It expanded by 3.2
percent in the oil and property boom year of 2008.
The International Monetary Fund forecast the emirate's real
gross domestic product to have shrunk by 0.9 percent in 2009 and
predicted a 0.5 percent growth for 2010.
Dubai's nominal gross domestic product fell 14.2 percent to
AED294.2 billion ($80 billion) in 2009, around 54 percent
of that of neighbouring Abu Dhabi, the data showed.
In 2009, the construction sector shrank by 19.5 percent in
real terms, while the real estate and business sectors plunged
by 19.8 percent. Both sectors account for about a quarter of
"Since 2009 there was a bounce in activity with recovery in
the global economy and the removal of some of the uncertainties
around some of the Dubai debt issues," said Giyas Gokkent, chief
economist at the National Bank of Abu Dhabi.
"When you look at Dubai, tourism, aviation and logistics are
doing well ... The bit that is not doing so well is real estate
and any activity around that," he said.
Concerns about Dubai's total liabilities, estimated at
around $115 billion or 144 percent of GDP, have eased after
state-owned Dubai World sealed a deal last September
to restructure almost $25 billion of debt.
Worries still persist about the ability of Dubai and its
companies to repay some of their bonds and loans worth billions
of dollars in the next four years.
Dubai house prices, already nearly 60 percent off their
peak, are set to drop another 10 percent over the next two years
as new units are released onto a market awash with supply, a
Reuters poll showed in January.
The economic output of the whole UAE, the world's third
largest crude exporter, is expected to grow by 3.4 percent this
year as oil prices hold above $100 per barrel, fuelled by
political turmoil in the Arab world, a Reuters poll showed last
Dubai's GDP growth alone is forecast to quicken to 2.8
percent in 2011, the IMF said in March.