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The Dubai Department of Economic Development (DED) today announced its latest economic outlook, and the emirate is expected to record growth 3.1% This year.Stimulated by the hosting of Expo 2020, Dubai’s growth is expected to accelerate to 3.4% In 2022.
His Royal Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Dubai Executive Committee “The vision and leadership of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has brightened the development prospects of the emirate, and the government has taken decisive measures under his guidance. Mitigating the impact of global challenges on the economy. These efforts are accompanied by the country’s new legislation and amendments to investment and residence laws. Together, these measures have reinvigorated the economy, stimulated strong flows of local and foreign investment, and restarted the emirate A journey of development, diversification and sustainable economic growth. In the coming years, Dubai is expected to become a greater global investment and talent destination, as well as a city that provides exciting new opportunities for businesses, entrepreneurs and innovators.”
In accordance with the leadership’s instructions, DED is working together to mitigate the impact of the pandemic on businesses, especially by facilitating transaction procedures and commercial licenses. The department will continue to adopt best practices and high-quality standards in an effort to make Dubai the world’s leading smart city. DED’s active participation and open communication channels with the business community and the entire society ensure the design and implementation of the best preventive and practical measures, as well as safety rules to ensure public safety and smooth operations.
When commenting on the latest economic outlook data, HE Sami Al Qamzi, Director General of Dubai Economy “Dubai’s latest economic indicators show that the precautionary measures, comprehensive vaccination campaigns, stimulus plans and legislative amendments adopted by the UAE and Dubai are correct. Dubai’s economy is now firmly on the road to recovery and is affected by corporate And the support of increased consumer confidence. This especially includes the business activities most affected by the pandemic, such as tourism and transportation. In the UAE Vice President and Prime Minister and Ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum Under the guidance of His Highness and the follow-up of His Highness Sheikh Hamdan bin Mohamed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Committee, the guidance of the Emirates in a comprehensive and ambitious strategic vision It has resumed its development history with the aim of expanding domestic demand and exports, opening up new markets, and attracting investors and talents.”
Economic Outlook 2021-2022
In 2020, Dubai’s actual output will be lower than the existing capacity in other parts of the world. Although the government has provided strong support to companies from all walks of life, the restrictive measures have put pressure on both supply and demand, and together have led to a sharp decline in economic activity, including in Dubai.
Kamzi Recalling the five consecutive stimulus plans launched by the Dubai government from March 2020 to September 2021, they include a number of supportive measures, such as suspension and reduction of various fees, reduction of tariffs, utility bills, postponement of rent payments, and cancellation of fines.The total financial cost of the five packages is 7.1 billion dirhams, or 1.6% The GDP of Dubai. These packages are the basis of the economic support measures introduced by the UAE Federal Government, including the “Targeted Economic Support Program” launched by the Central Bank of the UAE in March 2020 to reduce the financial burden of enterprises and help many of them avoid bankruptcy.
HE Sami Al Qamzi It was pointed out that although the developments related to the pandemic have brought setbacks to the global economy, compared with other countries, Dubai witnessed a relatively faster recovery in sectors such as transportation and tourism from September 2020 to July 2021. Expo 2020 is expected to bring a strong impetus to the entire economy, especially in the fields of transportation and tourism.
Taking into account recent developments and future prospects and risks, DED predicts that Dubai’s GDP will grow 3.1% In 2021, given the significant recovery that began in the second quarter, especially during the almost complete closure of events in April and May 2020. The forecast also takes into account the expected positive impact of the 2020 World Expo on economic activity.As shown in the chart below, the accommodation and catering service industry is expected to grow 8.5% By 2021, compared with 2020, transportation, storage and communication will be 4.1%, It reflects that tourism and transportation activities are expected to gradually recover by the end of 2021.Following the slowdown caused by COVID-19, the wholesale and retail trade sector is also expected to resume most activities and achieve growth 4.7% 2021, while construction activity may decline in 2021 2% Due to the stabilization of residential, office and hotel space construction, and the relative decline in infrastructure-related construction after rapid growth in the years before 2020.
Kamzi Point out that growth is expected to accelerate in 2022 and reach 3.4%, The continued recovery of activities most affected by the pandemic, such as tourism and international transportation, will also benefit from the Expo 2020 events in the first few months of 2022.
Compared with the fourth quarter of 2020, the 1% economic growth in the first quarter of 2021 marks the beginning of the recovery phase
The economic performance report released by the Dubai Statistics Center shows that Dubai’s economy has achieved growth 1% The first quarter of 2021 is compared with the fourth quarter of 2020, based on preliminary estimates of seasonally adjusted GDP data.
This increase is mainly due to the outstanding performance of the manufacturing industry, the improvement of tourism, transportation and warehousing activities, as well as the significant increase in the performance of the financial industry during the same period.
HE Aref Al Muhairi, Executive Director, Dubai Statistics Center, Said: “These figures show that compared with 2020, the economies of Dubai and the UAE have experienced positive development and rapid recovery. In 2020, driven by the slowdown in tourism, transportation and other economic activities, the global economy has emerged. Significant decline.. This is the natural consequence of the pandemic on the global economy.”
Muhaili Explain that Dubai’s economy has shrunk -3.7% Compared with the first quarter of 2020, the first quarter of 2021.Nonetheless, given that the contraction in 2020 will reach -10.9%, Compared with 2019.
Muhaili Said that although some activities have declined in the first quarter of 2021, other activities, especially those of strategic importance, have seen strong growth.This is most obvious in the trade sector, and its contribution is close to twenty four% To Dubai’s GDP, its growth reached 2.8% Compared with the same period in 2020, the first quarter of 2021. The trade sector is one of the main sectors, and its contribution to economic activity has mitigated the economic impact of COVID-19.
Dubai’s foreign trade data released by Dubai Customs shows that non-oil foreign trade growth in the first quarter of 2021 10%,achieve 354.4 billion dirhams, compared to AED 323 billion Significant growth in exports in the first quarter of 2020 25%,achieve 50.5 billion dirhams, The value of imports increased 9%,achieve 204.8 billion dirhams, And the value of re-export has increased 5.5%,achieve 99 billion dirhams.
Financial insurance business also achieved growth 3.5% In the first quarter of 2021, compared with the first quarter of 2020, their contribution to the emirate’s GDP rose to 12.8%It is also one of the sectors that helps reduce the impact of COVID-19 on economic performance.This performance is due to the increase in total deposits and loans in the first quarter of 2021, as loans increased 2.6% The deposit balance has increased 3.3%, And the loan interest rate dropped twenty four% And deposit 35%.
In addition, there has been an increase in manufacturing activity. 3.2%, Their contribution to overall economic performance increases to 9.5%Therefore, this is one of the activities that helps reduce the impact of the global economic recession on the emirate’s economy. Activities in the food industry, pharmaceutical products, rubber and plastic products, and base metal manufacturing have contributed positively to the growth of the manufacturing industry.
Real estate activity also achieved growth rates 2.4% In the first quarter of 2021, compared with the first quarter of 2020, it helps 8.7% Real GDP. Therefore, this is one of the supporting activities to overcome the global economic recession and its impact on the emirate’s economy. Compared with Q1 of 2020 and Q1 of 2019 before the outbreak of the epidemic, the real estate industry in Dubai has achieved a substantial increase in sales transaction volume in Q1 of 2021. This shows the high flexibility of the Dubai real estate industry and its ability to respond to economic development and demand.
The Dubai Statistics Center report indicated that in the first quarter of 2021, the COVID-19 pandemic affected the accommodation and food services, transportation and storage sectors.Both activities are reduced 25.6%, Compared with the first quarter of 2020. This decline is considered normal in the global economic environment, because most countries in the world have closed airports, land and sea border crossings, and have taken preventive measures, resulting in a reduction in the flow of international tourists and resulting in significant Negative impact. The impact on the global tourism movement.
Given Dubai’s key role in regional and global trade and air passenger transport, Dubai’s economy is expected to be affected by global conditions, but it is important to note that the emirate’s flexibility, advanced capabilities and strategic management system can quickly and effectively Responding to the crisis, thereby minimizing the economic cost of the pandemic, both in absolute terms and compared with many regional and global economies.
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