Dubai economy seen growing 2.3% this year

Dubai's economy is expected to grow by 2.3 per cent this year as the emirate recovers from the global crisis, the head of its statistics office was quoted as saying on Tuesday.

"Dubai enjoys an infrastructure and legal framework that makes it attractive to foreign investment and that support the business environment," Arif Obaid Al Muhairi, Executive Director at Dubai Statistics Centre, was quoted as saying on its website www.dsc.gov.ae.

"This helped strengthen the emirate's economy in the face of the global financial crisis to produce positive growth during the first half of the year. It is expected to be 2.3 per cent by the end of the year," he said.

Muhairi's forecast is more optimistic than that of the International Monetary Fund (IMF), which said on Sunday the emirate's economy is likely to grow by a modest 0.5 per cent this year, after shrinking 0.9 per cent in 2009, due to a foreign trade pick-up.

Official 2009 gross domestic product data for Dubai, which is estimated to account for over 32 per cent of the economy of the UAE, the world's third largest oil exporter, are not available.

In February, when uncertainties around flagship Dubai World weighed on the market, the IMF saw Dubai's GDP contracting by 1.3 per cent this year. Dubai's economy grew 5.7 per cent in real terms in 2008.

The real-estate focused Gulf business hub accounts for around 80 per cent of the UAE non-oil trade. Its exports jumped 46 per cent in the second quarter compared to a year ago, while re-exports and imports also expanded at double-digit rates.

Muhairi said Dubai's population was on the rise, while the jobless rate in the city - known for ambitious projects such as artificial palm-shaped islands - stands at 0.8 per cent.

"According to field surveys, the rate of population growth was around seven per cent over the first nine months of the year," he said. "The number of residents is estimated at 1.87 million."

Dubai government-controlled DP World has $3bn available to fund its expansion plans but does not rule out going to the market in the future, its chief executive told Al Arabiya news channel on Tuesday.

Mohammed Sharaf said the company did not need additional liquidity until the end of 2012 but was studying ways to finance future expansion plans.

"We have $3bn worth of liquidity ready, but that does not mean that we don't study for after 2012," he said.

The port operator's container volumes in the third-quarter climbed eight per cent, on a consolidated basis, to 7.3 million TEU, or twenty-foot equivalent container units’, the firm said in a statement to the Nasdaq Dubai bourse on Monday.

DP World's new developments in Vallarpadam in India and Karachi in Pakistan remained on schedule to open later this year, it said in the statement.

DP World's first-half net profit after tax from continuing operations rose 10 per cent to $206 million.