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Dubai economy to contract 0.4 pc: report Dubai: The Dubai economy is forecast to contract in 2010 for the second year in a row, said a research report released here. However, the report expects the UAE economy as a whole to emerge from the recession this year with a 2.5 per cent GDP growth. The ‘UAE Vision 2010’ report by Shuaa Capital, a major city-based investment bank, said the Dubai economy will contract by 0.4 per cent this year but a massive improvement from a five per cent contrast last year. The projected negative GDP growth is mainly due to declines in residential sale prices and Emirate’s population, which fell by around 60 and nine per cent respectively. A recovery in oil prices will also see Abu Dhabi emerge from the recession this year and register a GDP growth of 1.4 per cent, compared to a contraction of 2.7 per cent in 2009, said the report. "The capital will benefit from a recovery in oil prices and increased output this year, as well as strong growth in the non-hydrocarbon sector, which will be supported by government investment and spending," said Shuaa Capital chief economist and head of research Mahdi Mattar, while releasing the report. "Meanwhile, we anticipate the Dubai’s economy to contract 0.4 per cent in 2010, as the key construction and real estate sector continues to be a drag on growth in the Emirate." The report says it expects the UAE capital markets to grow by up to 25 per cent this year. A resolution of the Dubai World debt story will be the main catalyst for this growth, believes Mattar. Back |
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