Dubai’s economy, spending to pick up growth this year after slow 2016
Dubai’s economic growth slowed last year because of low oil prices and sluggish global trade, official data showed on Tuesday, but the government predicted a modest pick-up this year.
The economy expanded 2.7 per cent in 2016, Sheikh Ahmed bin Saeed Al Maktoum, chairman of the emirate’s Economic Development Committee, said in a statement. That is below growth of roughly 4 per cent in 2015.
But Sheikh Ahmed predicted growth would pick up to 3.1 per cent in 2017. Dubai, with a diversified economy that focuses on tourism and international business services, has been outperforming most of the Gulf Arab oil exporting states in an era of low oil prices.
The emirate has continued to invest heavily in real estate and transport projects before it hosts the World Expo in 2020. Last month it announced a state budget that envisages total spending rising to AED47.3 billion ($12.9 billion) this year from AED46.1bn planned for 2016, including a 27 per cent jump in infrastructure spending.
3 per cent growth
The UAE expects that its economy will growth nearly three per cent in 2017. Minister of Economy Sultan Al Mansouri said local daily Gulf News last week that he expects the “country’s GDP growth this year to remain almost steady compared to 2016 at three per cent”.
The International Monetary Fund (IMF) projects that the emirates will see a 2.5 per cent growth this year after recovering from 2.3 per cent in the previous year.
Leading consultants Faithful+Gould said on Tuesday that the UAE will broadly keep its projects investment at 2016 levels, with $900m allocated to federal projects within the budget and $325m for government housing.
Dubai’s budget at $12.9 bn has an expected 27 per cent increase in infrastructure spending to support the commitment from government for Expo 2020 works. However, Abu Dhabi is likely to slow schemes again for 2017, said the London-based consultancy.
(With inputs from Reuters)