Dubai economy – Will it Stumble or Rise?
Dubai is the home of amazing, unusual buildings that resemble the imaginative creations of hyperactive children. Dubai initially had no effects from the 2000 recession, which started in the US as well as had an impact on the whole globe. The effects were felt strongly in all nations. Megastructures were still being built while it wooed and seduced the globe with its ideals. Dubai succeeded to capture money via constant reinvention thanks to the audacity and foresight of its sheiks. When the rest of the world saw uncertainty, they saw an opportunity. But this quickly changed.
Dubai was deflated after a 6-year tourist boom. By providing $15 billion to cover Dubai's debt, Abu Dhabi helped out the decadent city. For the next four years, Dubai had breathing room as a result. However, due to Dubai's lack of the oil reserves Abu Dhabi boasts about, there is concern about its capacity to repay its debt. Some of the most recognizable buildings in the world were planned for development in Dubai.
While some of these mega-structures seemed to have an unclear future, the majority had to be demolished. The continuing construction has abruptly stopped. The much-hyped "The World" is one such instance that sticks out. There is currently no building anywhere on either of the islands, and there is just one "display house" on the property. The unemployment rate is high and real estate values have dropped. Dubai's debt deadlines in 2011 are enormous.
Most of Dubai's income comes from the real estate, tourism, and service industries. The contribution of oil to Dubai's GDP is now less than 6%. This situation could soon alter. There are enormous oil reserves in the recently found offshore oilfield called "Al Jalila," which was called after Sheikh Al Maktoum's daughter. It's anticipated that this oil field will begin producing at some point in 2011. This finding might have a positive impact on Dubai's economy. Will this provide Dubai with much-needed relief?
UAE's Economy is Robust
The growth of the UAE's real sector, which has greatly benefited from the higher oil prices as well as the government's very attractive policies that helped raise FDI as well as a migratory of wealth from other regions of the globe to the UAE, according to Shailesh Dash, a financier as well as a serial entrepreneur based in Dubai, has shown the UAE to be one of the finest economies around the globe today.
The real estate market as well as the capital markets have both seen growth as a consequence of this, and associated businesses like the tourist and service sectors have also benefited. We anticipate that this will be the case, at least until the first 50 percent of 2023, and that the economy will continue to be able to draw in foreign investment and improve FDI, which will maintain GDP growth that is superior to that of most other regions of the world, Dash told Khaleej Periods on Wednesday.
UAE Has No Recession
The UAE is unlikely to have a recession, according to Vijay Valecha, the chief investment officer at Century Financial, because of the expansion of the oil industry and the country's strong non-oil economic performance.
Since the sale of hydrocarbons contributes to 30% of the UAE's GDP, it is apparent that fuel costs will have a significant impact on the country's performance during a worldwide economic crisis. The sanctions put in place against them are expected to restrict the supply of petroleum, yet tensions between the West and Russia remain high. According to Valecha, this gives the oil prices "sufficient support, which would buffer the UAE economy.
He said that the non-oil industries of tourism, real estate, and construction had made significant gains this year. That is not unexpected, he continued, given the UAE is a free trade center thanks to its first-rate infrastructure as well as stable political environment.
Additionally, far earlier than other areas of the globe, the UAE's strong health system allowed for the relaxation of covid limitations. By enabling it to host several events this year, this relaxation of regulations provides a real boost to the quasi- sector's economic development, according to Valecha.
In addition, he said that the UAE's hotel industry profited from many soccer fans choosing to stay there during the World Cup in Qatar. As a consequence, there were up to 120 flights each day between Dubai as well as Qatar during the World Cup.
Tourism Will Fuel The Economy
The Economic state has shown its resiliency in the past, according to Hatem Elsafty, CEO at Business Link, and it will once again come out stronger next year.
From the number of inquiries we get at Business Link about the establishment of new travel and tourist companies, I am certain that this industry will make a significant contribution to the economy of the United Arab Emirates in 2023. After COVID, the nation has already recovered significantly. However, nothing can undermine the UAE's standing as a major tourist destination shortly, Saftay said Khaleej Times.
He said that despite assertions of a worldwide downturn, the decline in the Economy is foresighted due to significant investments in emerging technology and a rise in international capital.
The managing director of Connect Group, Aaron Portero, stated: "Uncertainty prevails and companies are closely monitoring their bottom line as recession looms in many areas of the globe. Many people find it difficult to commit to full-time jobs as a result, despite their desire to fill a void.
Also Check: jobs in Dubai
A Financial Center
According to Peter Maerevoet, worldwide CFO at Tradewind Financing, the UAE has made significant efforts to diversify its economy over the last two decades.
"The government had able to maintain its continuous aid to businesses both during as well as after Covid, which allowed them to continue drawing new investors. This was accomplished via the development of new inventive smart policies and legislation. Irrespective of their scope and size, this has significantly aided the nation in becoming a center for enterprises from various sectors, according to him.
He said that factoring for non-banking institutions, which was unheard of until 2021, would be the finest illustration of this. Trade financing businesses were only permitted to assist SMEs in the UAE by enhancing their effectiveness and efficiency, which in turn improved their contributions to the country's economy, when the UAE Taking account Law was published in August 2021, he added.