Dubai's economy grew 1 per cent in Q1

The economy of Dubai grew an estimated 1 percent in the first quarter helped by a government stimulus programme, according to the governor of the emirate's financial free-zone. "Dubai has quickly moved into recovery mode as the economy shows signs that it is improving," Omar bin Sulaiman, Governor of the Dubai International Financial Centre and Vice Chairman of United Arab Emirates Central Bank said. "We estimate Dubai's economy to have grown by 1 percent in the first quarter, fuelled by the government stimulus package and the increase in expenditures," a DIFC statement quoted bin Sulaiman as telling the British Business Group Forum in Dubai. Dubai launched a $20 billion bond programme in February, issuing the first half to the UAE central bank to enable the Dubai government to support firms struggling to meet debt and other financial commitments. Dubai's 2009 budget is 42 percent higher than the previous year with expenditure at 37.7 billion dirhams ($10.26 billion). Dubai -- a regional trade and tourism hub -- has suffered from a sharp downturn in real estate prices and scores of expansion projects have been shelved, leading to thousands of job cuts. Dubai, one of seven emirates in the UAE federation, derives only about 3 percent of its GDP from oil, and has faced pressure from depressed tourist visits, retail sales and trade flows. Residential real estate prices are set to fall almost 40 percent this year, a Reuters poll showed last month. Bin Sulaiman said confidence is starting to come back to the real-estate sector in Dubai, according to the DIFC statement. "This is very much an issue of confidence, both globally and locally ... Many international investors and funds from the region have expressed their interest in investing again in the Dubai real estate sector," bin Sulaiman said. "The most important result of the crisis has been an increase in efficiency within government and government-related companies," he said.