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19 March 2024

'Dubai to grow faster than global economy'

Dubai’s economy is projected to grow 4.5 per cent next year which will be higher than the global growth forecast of 3.5 per cent. (Reuters)

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By Waheed Abbas

Dubai’s economy is projected to grow 4.5 per cent next year which will be higher than the global growth forecast of 3.5 per cent, said a senior Dubai official on Tuesday.

Sheikh Ahmed bin Saeed Al Maktoum, Chairman of the Economic Development Committee in Dubai, President of Dubai of Department of Civil Aviation and Chairman and Chief Executive of Emirates Group, said the growth – which is expected to continue rising above that level in coming years – will be driven by both government and private sectors.

Dubai’s high quality infrastructure will maintain the emirate’s competitiveness, Sheikh Ahmed said, adding that the emirate is “fully alert for any challenges from global economy or other external factors.”

Addressing the UAE Economic Outlook Forum in Dubai on Tuesday, he revealed that the Dubai government will avoid budget deficit.

Sheikh Ahmed also forecast that the UAE’s economy to grow 4.5 per cent next year which is a very good considering the volatility in the global markets.

He said the government would rein in inflation to maintain emirate’s competitiveness and help keeping people’s purchasing power high.

Inflation in Dubai reached 4.4 per cent in October 2014 which was highest since May 2009, but it dropped again to 4.2 per cent in November.

Sheikh Ahmed’s remarked were reiterated by Dr. Mohammed Lahouel, Chief Economist at Dubai’s Department of Economic Development (DED).

Lahouel said Dubai GDP grew 4.6 per cent last year and it’s forecast to grow four per cent this year driven mainly by economic diversification and recovery in overall economy.

“Dubai economy to grow higher than global rate but close to emerging markets forecasts. The growth will be driven by trade, real estate, manufacturing and services sectors,” said DED chief economist, forecasting 4.5 per cent economic expansion for the next year.

He said the external economic environment will be challenging but relatively favourable from Dubai’s perspective.

Commenting on impact of decline in crude prices, he said: “Sharp drop in oil price, if persists, may have mixed effects on Dubai’s economy.”

Releasing UAE Economic Outlook 2015 report, Lahouel projected that the government capital spending is expected to be steady but changes could take place in 2016.      

Lahouel said households may anticipate low future oil price and lower income, resulting in curtailing their spending in 2015.

Dubai’s adaptive capacity and its strong role as a trade hub along with growth resilience of main trade partners promise to deliver healthy growth in 2015, he added.