Supported by several factors, the most important of which is the hosting of "Expo 2020 Dubai"

Dubai economy is expected to grow 3.1% in 2021

  • Dubai has managed to overcome the consequences of the current exceptional global situation thanks to the directives of the leadership.

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Yesterday, Dubai Economy announced its economic growth forecast for the emirate during the next phase, as it is expected to achieve a growth rate of 3.1% in 2021, and the rate will accelerate in 2022 to record 3.4%, supported by several factors, the most important of which is the hosting of "Expo 2020 Dubai".

new stage

His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Council, said: “Thanks to the vision and directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, we were able to start a new phase of growth, with high performance rates. Strong by current global standards, despite the current challenges that the world shares in facing.”

His Highness added: "The flexibility of the work system, the speed in updating legislative frameworks that keep pace with global changes and support for business, and enhancing the environment that attracts investment, talents and innovative projects, are foundations that enable us to continue achieving our strategic goals and consolidate the foundations of a strong economy capable of facing various challenges."

His Highness said, in tweets on the blogging site "Twitter": "Dubai has managed to overcome the consequences of the current exceptional global situation, thanks to the directives and leadership of His Highness Sheikh Mohammed bin Rashid Al Maktoum, as the emirate's economy is expected to achieve a growth of 3.1% during the current year, It will rise to 3.4% in 2022. Our vision for the future is supported by loyal national energies and strong partnerships with the world.”

growth forecast

Depending on the global developments that may occur during the coming period, and the remarkable recovery starting from the second quarter, especially in the activities that almost completely stopped in April and May of 2020, Dubai Economy expects that the emirate’s economy will witness a growth of 3.1% during 2021.

These expectations depend on the repercussions of the expected Expo 2020 Dubai events on economic activities, as the accommodation and hotel services sector is expected to witness a growth rate of 8.5% in 2021 compared to 2020, and the transport, storage and communications sector is expected to grow by 4.1%.

It is also expected that the wholesale and retail trade will regain a large part of its activity, to achieve a growth of 4.7% in 2021. As for the construction activity, it is expected to decline in 2021 by 2%, as a result of the semi-stability in the level of residential construction, offices and hotels.

First Quarter

In addition, the economic performance report issued by the Dubai Statistics Center showed that Dubai's economy achieved a growth of 1% during the first quarter of 2021 compared to the fourth quarter of 2020, based on preliminary estimates of the seasonally adjusted real GDP.

This growth is driven by an outstanding performance in the manufacturing sector, an improvement in tourism, transport and storage activities, in addition to a significant growth in the performance of the financial sector.

Arif Al Muhairi, Executive Director of the Dubai Statistics Center, said: "The figures highlight the positive development and rapid growth of the economy of the Emirate of Dubai and the UAE compared to 2020, which witnessed major economic declines worldwide, driven by the decline in the sectors of tourism, transportation and other economic activities, as a natural result of the repercussions of (Covid-19). -19) on the global economy.

He pointed out that Dubai's economy has succeeded in achieving remarkable activity in several economic activities, especially those that are of high strategic importance, such as the trade sector, which grew by 2.8% in the first quarter of 2021 compared to the same period in 2020, contributing to the overall economic performance by 24.3 percent. %.

Transformative Industries

The activities of the manufacturing industries witnessed a growth of 3.2%, and the percentage of their contribution to the overall economic performance increased to 9.5%. Thus, it was one of the activities that contributed to alleviating the impact of the repercussions of the global economic downturn on the emirate’s economy, as the activities of manufacturing food products and the manufacture of pharmaceutical products contributed, And the manufacture of rubber and plastic products, and the manufacture of base metals, in pushing the manufacturing sector towards this positive growth.

real estate activities

Real estate activities achieved a growth of 2.4% during the first quarter of 2021 compared to the first quarter of 2020, contributing to 8.7% of the real GDP.

Data from the Dubai Land Department reveal that the real estate sector in Dubai recorded strong growth in sales transactions in the first quarter of 2021, compared to the same period in 2020 and 2019 before the outbreak of the epidemic, which indicates the high resilience of the real estate sector, and its ability to respond to economic developments. The demand for real estate in Dubai.

non-oil trade

Dubai’s foreign trade data, issued by the Dubai Customs Department, indicates a growth in non-oil foreign trade in the first quarter of 2021 by 10%, reaching 354.4 billion dirhams, compared to 323 billion dirhams in the first quarter of 2020.

Exports achieved a strong growth of 25%, reaching a value of 50.5 billion dirhams, while the value of imports increased by 9%, to reach 204.8 billion dirhams, and the value of re-exports increased by 5.5%, to reach 99 billion dirhams.

Financial and insurance activities

Financial and insurance activities achieved a growth of 3.5% during the first quarter of 2021 compared to the same quarter of 2020. Their contribution increased to 12.8% of the real GDP, and it is also one of the sectors that contributed to mitigating the repercussions of the effects of the “Covid-19” pandemic on economic performance.

This growth came as a result of the growth in total deposits and loans during the first quarter of 2021, as loans grew by 2.6%, and deposit balances grew by 3.3%.

In turn, interest rates on loans decreased by 24%, and on deposits by 35%.

Most affected activities

The Dubai Statistics Center report showed that the activities of accommodation, food, transport and storage activities were among the most affected by the repercussions of the pandemic during the first quarter of 2021, declining by 25.6% compared to the same period in 2020.

This decline is considered normal in light of global economic conditions, as most countries of the world closed their air, land and sea crossings to passenger traffic and took precautionary measures, which led to the reduction of the movement of international visitors, which had significant negative repercussions on the tourism movement worldwide.

As a result of Dubai’s pivotal role in serving the trade exchange between the region and the world, and as a corridor for many flights of individuals through Dubai airports, it is obvious that the emirate’s economy is affected by global conditions, but the flexibility and capabilities enjoyed by the emirate’s economy and its strategic administrative system enabled a rapid response. .

Al Qamzi: Precautionary measures are beginning to bear fruit

Director General of Dubai Economy, Sami Al Qamzi, said that the various economic indicators of the Emirate of Dubai confirm that the precautionary measures that have been taken, the comprehensive vaccination campaigns, the stimulus packages, and the legislative developments adopted by the UAE as well as the Emirate of Dubai, are beginning to bear fruit by enhancing confidence in economic institutions. , and the start of economic activities a new phase of growth.

He added: "Under the guidance of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, and the follow-up of His Highness Sheikh Hamdan bin Mohammed Al Maktoum, Crown Prince and Chairman of the Executive Council, Dubai continues its development path according to a comprehensive and ambitious strategic vision, which includes Many incentive initiatives that contribute to enhancing domestic demand and exports, opening new markets, and attracting investors and various professional competencies.”

The Director General of Dubai Economy expected that "Expo 2020 Dubai" will lead to a recovery in transport and tourism activities, and thus in the economy in general.

He also expected growth to accelerate during 2022 to reach 3.4%, driven by the continued recovery of activities that were most affected by the repercussions of "Covid-19", such as tourism and international transport, which will also benefit from the activities of "Expo 2020 Dubai" in the first months of 2022.

Hamdan bin Mohammed:

• «The flexibility of the work system, the speed of updating legislative frameworks, and the promotion of an environment that attracts investment and talent are foundations that enable us to consolidate the foundations of a strong economy capable of facing challenges».

• «Our vision for the future is supported by loyal national energies and strong partnerships with the world».

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