The 2020 Expo to boost up the growth of UAE and Dubai.
According to the S&P global ratings, on the brink of a surge in the economic activity that’s been associated with the Dubai Expo 2020, surged up 2.4 percent during 2019 up higher by 2018.
The rating agency also stated that “they expect that the entire completion of the Expo-2020 related infrastructural project as well as the additional residential housing-based supply for entering the market from the existing projects based this year.” The report also stated that “the boost in the tourism sector and relative spending generally linked with Expo 2020 would drive stronger growth in 2020.”
Due to the lower oil prices as well as a slowdown for the property sector, it has taken a heavy toll on Dubai’s otherwise booming economy as it managed to grow under 2 percent during 2018, its slowest expansion since 2010. With the mega Dubai Expo 2020 event on the corner, the entire focus is on spending heavily to boost infrastructure as part of preparations for the Expo.
The Emirate’s Road and Transport Authority has opened up a Dh 1.3 billion road networks that lead to the Expo 2020 Fair site.
The rating agency also stated in its report that the Dubai’s overall economic climb could be expected to be at an average of 2.5 percent annually during the 2019-2022 period and the trade as well as transportation industry taking center stage apart from the Expo event.
Although, it cannot be denied that there would be downside risks to the growth due to trade and real estate sector getting hit as result of the tumbling of the property prices from 5 percent to 10 percent during 2019, government has recently announced and introduced relatively newer economic stimulus plans covering up small and midsize enterprises and public-private partnerships, thus slowly surging up Dubai’s longer-term growth potential.
“A new law has been provisioned to permit full foreign possession of corporations outside existing free economic zones ought to conjointly encourage the private investment and improve the business climate,” as stated by the rating agency.
The report conjointly notes UAE banks are additionally resilient than within the previous real estate cycle in 2002-2008, thanks to stronger regulation and additional conservative disposal to real estate developers and mortgagors.
“Regulations created in 2013 that cap the loan-to-value ratio are positive for the steadiness of the banking sector.” The UAE’s economy can accelerate to 2.6 percent by 2020 from 1.7 percent in 2018, partially thanks to magnified economic activity related to the assemblage, S&P stated. Dubai contributes a significant quantity to the non-hydrocarbon sector of the UAE, representing regarding seventy percent of UAE’s real GDP.