DURING 2019 DUBAI ECONOMY EXPECTED TO WITNESS A GROWTH OF 2.4 % AND TO GET FULL SURGE DURING 2020

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.