Dubai economy forecast to soar by 5 per cent in 2012

by JBrown on July 19, 2012

in Business

Post image for Dubai economy forecast to soar by 5 per cent in 2012

The emirate has bounced back spectacularly well from the slump and is seen as a safe haven for business investment in the Middle East

New figures have revealed that Dubai is one of the highest performing financial centres in the world. The statistics showed that in February 2012, the Dubai Financial Market General Index rocketed by 21 per cent, which was higher than anywhere else globally.

According to the chairman of Dubai’s Supreme Fiscal Committee, HH Sheikh Ahmed Bin Saeed Al Maktoum, Dubai’s economy is forecast to rise by 5 per cent this year, after growing by 3 per cent in 2011.

Analysts say Dubai’s success in 2011 was down to a number of factors. The city benefited from its strategic position between East and West, its status as a safe haven in the Middle East, where there was unrest in many other places, plus rising global oil prices.

Home sales increase:

Dubai’s recovery was reflected in the record 51 million passengers who went through Dubai International Airport. Other government data also pointed strongly indicated resurgence. Home sales increased 67 per cent by value in the fourth quarter from a year earlier, according to Land Department data. And tourist arrivals rose 10 per cent in 2011 as hotel revenues gained 20 per cent.

Businesses have also been opening in Dubai. There were a total of 14,360 new licenses issued by the Department of Economic Development in 2011, a rise of 3.9 per cent on 2010.

Stock trading has bounced back spectacularly well. At the end of 2011, share prices and trading values in Dubai fell to their lowest levels since 2004. But now stock trading has increased eight-fold in the first three months of 2012, the most among the world’s 40 biggest markets. Dubai brokers are said to be working round the clock to deal with all the increased activity.

Great news for investors

The success story of Dubai’s markets and business in 2011 is a far cry from the situation in 2009 when the economy suffered a major slump when the state-owned holding company Dubai World said it was seeking to freeze debt repayments.

The positive data is bound to fill investors with renewed interest in one of the world’s most dynamic economies. The Dubai property market is a far more stable bet than back in 2009. This should spark interest in the many new hotel developments, such as The First Group’s two luxury hotel apartment projects in Tecom, Metro Central and Grand Central, which are situated in the bustling business district of Tecom in the heart of “New Dubai”. The luxury end of the market did particularly well in 2011, soaring 17.6 per cent.

Meanwhile, at the end of 2012, the business community in Dubai will get more facilities for ease of business. The Government is launching a ‘120 days hassle free licence’. The Department of Economic Development (DED) says the initiative is aimed at giving businesses in Dubai a head start and promoting the emirate’s competitiveness.

 

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