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Mon 14 May 2012 06:54 PM

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Iran sanctions have modest impact on Dubai

Dubai Economic Council chief says global ban has so far had limited impact on trade

Iran sanctions have modest impact on Dubai

Dubai's economy has felt only a modest impact on trade from international sanctions against Iran so far, the head of the emirate's government advisory council said on Monday.

"It's still moderate in terms of trade but we are closely watching the number how it is affecting the near term and the long term as well," said Hani al-Hamli, secretary general of Dubai Economic Council.

"How much? I do not recall the numbers," he told reporters on the sidelines of a conference on financial restructuring and bankruptcy.

Dubai's foreign trade jumped by a record 22 percent in 2011, driven by strong flows with Asia that offset the impact of sanctions against Iran, its traditional trade partner. Dubai, one of seven United Arab Emirates, is the regional trade hub.

Last month, Dubai Customs' chief said he believed sanctions targeting Tehran's disputed nuclear programme and signs of economic slowdown in emerging economies such as China would not have a strong impact on trade.

Dubai's direct re-exports to Iran grew 29 percent to AED31bn ($8.4bn) last year, the fastest growth rate over the past five years, although figures showed a marked slowdown in the last three months of 2011.

The emirate's total direct trade with the Islamic Republic stood at AED36bn in 2011.

With the exception of Dubai, Gulf Arab trade links with Iran are minor. Iran's energy-reliant economy is reeling from sanctions aimed at stifling its lucrative oil exports.

The IMF said in May 2011 that sanctions against Tehran existing at that time could shave off 0.2 to 0.7 percent of UAE gross domestic product annually.

Dubai, which accounts for nearly a third of the UAE's GDP, is aiming for economic growth of 4.5 percent this year, up from an estimated expansion of more than 3 percent in 2011, the emirate's top official said in February.