$18bn Dubai debt due next year

Dubai government and its related entities have plenty of options to meet the debt maturing for next year which is amounting to $18 billion (Dh66 billion), according to analysts at Standard Chartered bank.

Speaking at a press conference in Dubai on Sunday, Shady Shaher, an economist with Standard Chartered, said that total debt maturities of sovereign and quasi-sovereign entities in Dubai are estimated at $18 billion for next year but the most challenging debt issues have already been restructured.

The Dubai government and its entities will tap marketing funding sources to meet debt needs for 2011, Shaher told Gulf News.

Daube-Pantanacce, senior economist for the Middle East and North Africa, said there is healthy demand for Dubai debt in the international market as most of the maturities will be met through capital market funding.

However he didn’t rule out restructuring of more GREs.

The analysts were speaking at the presentation of global economic outlook.

Shaher forecast that the credit growth would continue to remain weak during the first half of next year as bank loans still exceed deposits. The gap narrowed from Dh47bn in January 2010 to Dh25.5bn in September.

“Credit conditions should begin to improve moderately in 2011 on the back of the economic recovery and improving market sentiments following Dubai World’s debt restructuring,” said Shaher.

Dubai’s economy may grow between 1.5 per cent and 2 per cent in 2010 and four per cent next year, mainly driven by expansion in the services, trade and tourism industries, said Shaher.

The analysts also projected that the Dubai economy will grow by four per cent next year, driven by significant buoyancy in trade, logistics, tourism and services sector.

Standard Chartered also projected that Dubai real estate sector will bottom out by the end of 2011.

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