Dubai Economic Growth Accelerates

Dubai’s economic development is strengthening before the Expo 2020 project and this is the apt time for company formation in Dubai. The country’s economy is expected to grow faster in this year and in 2020 because of robust growth in major sectors with GDP going over Dh400 billion in 2019.

Last year, the preliminary economic growth has slackened to 1.9 percent but it is likely to gain momentum this year going up to 3 percent and further to 3.7 percent in 2020. The development is reinforced by business services, construction and real estate, hotels and restaurants, and also transport and logistics sectors. However, the trade war escalation, soft consumer spending and sluggish global growth could pose risk to the growth of Emirates in medium term.

The Central Bank of the UAE has forecasted that the economy would expand at 2 percent rate this year. The UAE GDP went up 2.2 percent in quarter 1 of 2019. The nation’s GDP is expected to grow at the same rate in the quarter 2 of 2019, but, it would slow down in the quarter 3 and 4 going down to 2 percent and 1.6 percent respectively.

Dubai Economy Tracker index made by Emirates NBD has recovered severely year-to-date, and has touched 58.5 in May, due to stronger output, continued price discounting and new order growth.

Dubai Statistics Centre (DSC) is of the view that the emirate’s economy expanded to 1.94 percent in the year 2018 going to Dh398.13 billion. It was driven by an upsurge in trade and infrastructure sector investments. Now, the GDP is slated to reach Dh410 billion mark in 2019 resulting in 3 percent growth and up to Dh425 billion in 2020 after 3.7 percent growth.

Monika Malik, who is the chief economist at Abu Dhabi Commercial Bank, has forecasted the economic activity getting stronger in 2019 and 2020, going up from the GDP growth level in 2018.

“Central to the recovery is the outlook for stronger investment activity, in part linked to greater project implementation to complete infrastructure and facilities ahead of Expo 2020 Dubai. The Expo itself, should then boost tourism inflows and related spending, including in hospitality services. However, we highlight the ongoing global uncertainties and have taken a cautious approach at this point on the external backdrop,” she said.

Anish Mehta, who is the vice-chairman of the Institute of Chartered Accountants of India of the Dubai chapter, was of the view that Dubai’s growth is going to speed up because of diversification into varied economic activities in contrast to previous years when the economy was majorly driven by oil and real estate.

Manjeet Singh Chhabra, who is the managing director of credit rating agency called CRIF UAE, forecasted that Dubai would grow at a modest rate in remaining 2019 and the growth would pick up further in the year 2020. If you need any assistance to set up your business and for best company formation in UAE, do get in touch with us and we would be happy to help.