Dubai grows faster in H1 2012, seen even better in 2013

Economy grew 4.1% in H1 2012, led by hospitality, retail and wholesale sectors

Dubai's economy expanded 4.1 per cent from a year earlier in the first half of this year, official data showed on Monday, indicating the Gulf's main trade and financial hub is holding up well in a weak global environment.

Foreign trade, including re-exports, rose 11.4 per cent in the first half, according to Reuters calculations.

Dubai's gross domestic product growth in the first half was faster than 3.4 per cent recorded in 2011. A major reason was booming tourism.

Hotel guest numbers in the emirate jumped 9.6 per cent to 5 million in January-June, while hotels and restaurants saw a 16.1 per cent surge in their business, said Arif Obaid Al Muhairi, executive director at the Dubai Statistics Center.

"These indicators are moving towards growth because of the diversity of Dubai's tourism product," he said in a statement. "That helps attract more tourists, which reflects positively on demand in related activities and improves performance of the local economy."

Wholesale and retail businesses, which make up nearly a third of Dubai's GDP, grew 3.8 per cent in the first six months of 2012. The real estate and business services sector rose 1.5 per cent.

The Dubai housing market has been recovering gradually but bank lending in the UAE remains sluggish.
 
STRONG OUTLOOK

Muhairi said the Dubai government's latest plans for huge tourism and retail developments would help boost tourist numbers and contribute to economic growth.

"We see a strong growth outlook for Dubai next year, supported with a continued favourable outlook for consumption and a gradual pick-up in investment," said Monica Malik, chief economist at EFG-Hermes in Dubai.

The government has said it expects Dubai's GDP to rise more than 4 per cent in 2013.

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