Expected growth of the Dubai economy by 4% during the year 2021 and 2.3% in

Since the beginning of the new Coronavirus (Covid-19) pandemic, Dubai has shown a rapid and high level of coordination in the mechanism of dealing with the pandemic and addressing its repercussions that affected various aspects of life locally and globally, and this was reflected through the systematic and deliberate progression in the various decisions and preventive measures adopted by the emirate according to the directives His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, may God protect him, and with the close follow-up of His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Council, as their leadership of this crisis formed a global model to be emulated. .

The concerned authorities in the Dubai government worked closely to monitor market conditions closely through continuous communication with its partners in the private sector and agreement with the spectrum of society to adopt the best precautionary measures and measures - preventive and proactive - that ensure on the one hand public health and on the other hand support the smooth running of work and move the wheel. This is what paved the way for a return to normal life and support for economic growth based on real and current data.

In this regard, Sami Al Qamzi, Director General of Dubai Economy, said: “The wise leadership has directed that the consequences of the pandemic not turn from a temporary health crisis into a permanent economic crisis and prevent the pandemic from inflicting permanent damage on people and companies through job loss and bankruptcy, and this is what made the emirate at the forefront. List of cities around the world that have gradually reopened different markets and sectors of work.Under the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Dubai has been a pioneer in launching several initiatives to reduce the challenges faced by individuals and institutions and have had a significant positive impact in reducing the size of the economic damage that was It could be caused by a pandemic.

Outlook for Dubai Economic Outlook 2020-2025

The period between March and October 2020 witnessed the launch of the Dubai government four stimulus packages to support the economy, mainly aimed at mitigating the repercussions of the closure on the emirate’s economy from the demand side of consumption, investment, trade and travel, as well as from the supply side affected by imbalances in the workforce, supply chains and the costs of carrying out activities. Commercial.

The value of these packages amounted to 6.8 billion dirhams, which helped mitigate the effects of the health shock and prevent it from turning into permanent damage to individuals and companies as a result of job loss or bankruptcy.

According to a recent study of Dubai's economy, these packages have contributed to reducing the effects of economic damage by limiting the expected economic contraction to -6.2% during the year 2020 at a time when the International Monetary Fund expects a similar decline in growth in many countries.

The precautionary and preventive measures to limit Covid-19 in the emirate of Dubai, in addition to travel restrictions around the world have had a severe impact on the activities of hotels and restaurants, whose results are expected to witness a contraction of (-20 percent) in 2020, followed by the transport and storage sector by a percentage. (-11 percent) and then retail and wholesale trade (-9 percent)

Based on its foreseeing the future, the Dubai government has laid strong foundations to ensure a rapid recovery.

Also, the support measures launched during the pandemic were designed and developed in a way that contributes substantially to the ongoing economic recovery efforts. Sami Al Qamzi explained: “These efforts include investing in health care and food security systems that will not only reduce the likelihood of future shocks, but will also contribute. It also aims to enhance the resilience of the emirate in facing these shocks if they occur. "

Al-Qamzi added that the continued flow of local and foreign investments, whether from the government or private sector, would support sustainable growth and the transition to a knowledge-based economy.

Last November, Cabinet Resolution No. (16) for the year 2020 was issued regarding defining the positive list of economic sectors and activities in which a foreign investor may fully own 100%, which supports the state’s efforts to attract foreign investments.   

In addition, last October, His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum launched the "Nasdaq Dubai Growth Market" aimed at assisting emerging companies and small and medium enterprises in attracting investors and financing their projects through an initial public offering. The "Nasdaq Dubai growth market" will be available. Not only for local companies, but also for companies from different countries of the world, which helps them to expand in the region and internationally in general.

In October 2020, Dubai also launched a new “Virtual Work Program” that provides an opportunity for foreign professionals working remotely abroad to make Dubai their residence and enjoy a safe and high-standard working and living environment.

This program comes on top of the new system that was launched in 2019 for long-term residency visas. This system allows foreigners to live, work and study in the UAE without the need for an Emirati sponsor with 100% ownership of their businesses within the UAE. These visas can be issued for a period of 5 or 10 years. It is renewed automatically.

These and other initiatives, along with hosting the Expo 2020, scheduled for next year, will be the cornerstone for increasing investment rates and job creation in the coming years.

His Excellency Sami Al Qamzi revealed the results of a recent study of the Dubai economy, on expectations of an acceleration of growth in 2021 to 4%, followed by growth rates ranging between 2.3% - 2.8% during the period from 2022 to 2025 (Figure 2), taking into account the current situation and future expectations of the global economy.

The economic repercussions of closing the markets during the first half of 2020

Initial reports issued by the Dubai Statistics Center showed a decline in the emirate’s economy by 10.8% in the first half of 2020, and Arif Al Muhairi, Executive Director of the Dubai Statistics Center, considered this decline normal and comes within the expected extent of the economic downturn in light of the major economic repercussions of the Covid-19 pandemic on the world Especially in the first six months of this year, and this decline is primarily due to the period of national sterilization, where the strategic priority has shifted towards combating the pandemic and preserving the lives of people and the health and safety of society by taking a number of strict measures, as happened in various countries of the world, such as limiting curfews and closing Ports which were expected to overshadow economic activity.

The data issued by the Dubai Statistics Center show that the activities most related to foreign transactions and those directed mostly to abroad were the most influential in the overall decline during the first six months of this year, with an impact of 85.4% of the total decline during the period, and these activities are trade Transport, accommodation and food activities, which are naturally affected by the closure of most countries of the world to their borders, as travel and tourism have ceased, and foreign trade has suffered from challenges in the flow of goods and services between countries of the world as a result of the closure of borders and airports.

Trade activity, transport and storage activity in the first half of 2020 witnessed a decline compared to the same period last year, as trade activity decreased by 15.1%. Despite this decline, trade activity continued to maintain the largest contribution to the emirate’s economy, as it contributed by an amount 24% in the overall economy, and this decline coincided with the gradual closure that began in mid-March and continued until June, and transport and storage activity decreased by 28.3% and pushed the entire economy of the emirate to decline by 3.6 percentage points, due to the complete closure of the aviation sector and the decline Demand for transport in general during the period of national sterilization and the accompanying closure process, and despite this decline, the transport and storage activity maintained a high contribution to the emirate’s economy, amounting to 10.3%.

The Dubai Statistics Center report shows that the activity of accommodation and food services (hotels and restaurants) was also one of the economic activities most affected by the repercussions of the Covid-19 pandemic during the first half of 2020, as activity decreased during that period by 34.6% compared to the same period of 2019, and decreased The contribution of the activity to reach 3.7% in the total economy of the emirate, pushing the overall economy to decline by 1.7 percentage points, which is an expected decline in light of the complete cessation of the movement of foreign and domestic tourism and the strict procedures of the establishments operating in these activities, which sometimes reached the point of closure to limit the spread of the Covid epidemic 19, and this activity was greatly affected in all countries of the world due to preventive reasons.

Real estate activities witnessed a decline of 3.7%, contributing 8% of real GDP, with an added value of nearly 15 billion dirhams during the first half of 2020, and this came as a result of the decline in rental prices for residential units and the decline in the margins achieved from the sale of real estate units.

Growth of financial and insurance activities

The financial and insurance activities sector achieved a positive trend, as it grew by 1.4% despite the global economic conditions, and it contributed to pushing the emirate’s overall economy positively by 0.1 percentage points, thus increasing its contribution to the emirate’s overall economy during the first half of this year to 11.5%. The banking sector in the country has a strong position to face any challenges in the future, as data from the Central Bank of the Emirates show that the UAE banking system remained active in the field of finance and credit during the first six months of 2020, which contributed to supporting the business and individual sectors during the crisis period. The data indicates the growth of bank credit to residents in general by 5.5% at the end of the period compared to the same period in 2019, and the data indicate a growth in financing for transport, storage and communications activity by 52% and by 19% for personal finance for business purposes, while financing for food industries grew by 10% and for industries. Chemicals and their products by 15%, and financing for agricultural activity increased by 9%, confirming the main role of the banking sector in supporting vital activities in the domestic economy.

Marati.

Productive activities (agriculture, mining, and industry) grew at a limited rate of 1% during the first half of 2020, and this growth came as a result of these activities remaining effective to secure the needs of society and sustain life for the population and establishments under balanced management that takes into account precautionary and preventive measures and ensuring the continuity of work of establishments Vitality.

The general government sector achieved a growth rate of 1.1% during the first half of this year compared to the same period last year, contributing 5.4% of the emirate's real GDP and pushing its economy positively by 0.1 percentage point, as the local government continued spending on development projects, as the rate reached Total government spending grew by 6% during the first half compared to the first half of last year.

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