Dubai exports, re-exports to grow 15%

Dubai expects to see a 15 per cent growth in exports and re-exports this year and reach 2008 levels as consumer confidence and business sentiment stabilise, said Hamad Buamim, Director-General of the Dubai Chamber of Commerce and Industry (DCCI).

Speaking to Emirates Business, he said the emirate has witnessed an average of 15 per cent month-on-month increase in the first four months of 2010, a trend that is slated to continue throughout this year.

"We have seen a total of Dh175 billion [in] exports and re-exports last year, which is a 15 per cent drop from 2008 levels. We expect to end up 15 per cent higher than last year and reach 2008 levels this year," Buamim said.

Figures from the agency show that the number of certificates of origin issued by the DCCI went up by 18 per cent from 48,151 in February to 57,144 in March, while value increased by 15 per cent from Dh16.2bn to Dh18.7bn over the same period. Exports from the UAE to the United States were up by 14 per cent from Dh213.5 million in December 2009 to Dh243.2m in January. During the same period, the UAE's exports to the European Union were up by four per cent from Dh595.2m to Dh618.92m in January.

"Exports are recovering," Buamim said. "Inflation remains very low and this is good for the business. The regional market continues to grow. Saudi Arabia, our biggest market, is active, [and] so are Iraq and Iran." Inflation is expected to remain low over the next few years but it would "take time" for the real estate sector to recover, he said.

According to the International Monetary Fund (IMF), the UAE's inflation is likely to remain subdued over the next five years, primarily due to a correction in the real estate and construction sectors. Slower money supply growth arising out of reduced crude oil liquidity as well as stable projections for commodity prices will all lead to inflation levels in single digits in the medium term. Up until 2008, the UAE's inflation levels had witnessed a pick up with housing costs rising and positively contributing to consumer prices.

Housing and utility prices, accounting for 36.1 per cent of the overall UAE Consumer Price Index weight, have been the main factor behind the increase in UAE inflation levels. Inflation fell to an average of 1.5 per cent in 2009 from the record 12.3 per cent in 2008.

Inflation in the UAE is projected to edge higher to 2.2 per cent in 2010 and three per cent in 2011. The IMF expects inflation to climb to around 3.2 per cent by 2015, which in comparison to the rate recorded during 2004-2008, when it soared to between five per cent and 12.3 per cent, is still very low.

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