São Palo – Dubai’s Gross Domestic Product (GDP) growth is expected to pick up between 2019 and 2022 after a slowdown in 2018, ratings agency Standard & Poor’s (S&P Global Ratings) reported. The news come from the newspaper Arabian Business. Last year, Dubai economy grew by 1.94%.
The ratings agency said that a recovery over the next three years – averaging about 2.5% growth – would be supported by increased economic activity associated with Expo 2020 and, after that, by traditional growth engines such as trade and transportation. Expo 2020 is a world exhibition that will run for six months in the emirate from October 2020 to April 2021.
Dubai’s GDP growth is expected to pick up after growing at its slowest pace in nine years last year, according to the research. In this new report, S&P said macroeconomic conditions in Dubai have deteriorated since 2013 in part due to lower oil prices and the deterioration in regional political relations.
“We expect a marginal pickup in economic growth to 2.4% in 2019, with support coming largely from the construction and real estate sectors. We expect the completion of Expo 2020-related infrastructure projects and additional residential housing this year,” said the agency.
A boost to tourism and related spending linked to Expo 2020 should drive somewhat stronger growth in 2020, S&P reported. However, after the event, economic growth will likely ease to around 2% through 2022. “Relatively low oil prices, accompanied by slower regional demand and rising protectionism in the United States and China, could further slow Dubai’s transshipment trade flows, which have been sluggish since 2016,” the report noted.
Dubai contributes a significant amount to the nonhydrocarbon sector of the United Arab Emirates, which represents about 70% of the country’s real GDP. According to S&P estimates, Dubai’s external trade accounts for about 72% of the UAE’s total non-oil trade.
The United Arab Emirates economy is expected to continue facing challenges in the medium term partly because of softer growth momentum in Dubai. The UAE’s economic growth will pick up to 2.6% by 2020 from 1.7% in 2018 in part due to increased economic activity associated with the Expo, the report said.
Translated by Guilherme Miranda
