The Expo 2020 project is expected to drive economic expansion in Dubai in the next year and beyond. Marwan Naamani / AFP
The Expo 2020 project is expected to drive economic expansion in Dubai in the next year and beyond. Marwan Naamani / AFP
The Expo 2020 project is expected to drive economic expansion in Dubai in the next year and beyond. Marwan Naamani / AFP
The Expo 2020 project is expected to drive economic expansion in Dubai in the next year and beyond. Marwan Naamani / AFP

Economic diversification and Expo 2020 to shield Dubai from oil price rout


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Dubai’s economy is expected to slow down for the year as a whole, as the construction and property sectors languish and global trade flows ebb. But, in the end, the emirate’s diversification will shield it from the oil price rout.

Last year, the Dubai economy grew by a healthy 4.1 per cent, according to data from the Dubai Statistics Centre.

For this year, forecasters are calling for growth of between 3 per cent and 4 per cent. The Expo 2020 project is expected to drive expansion next year and beyond.

At the higher end, the IMF forecast in April that Dubai would grow by 3.7 per cent this year. The National Bank of Abu Dhabi, meanwhile, is predicting 3.5 per cent growth and the research house IHS is at the low end, with a forecast of 3.1 per cent.

Alp Eke, the senior economist at NBAD, said this year’s expected easing is “mainly because of a slowdown in construction and real estate”.

He said: “The drop in growth is negligible, because Dubai will not be severely impacted by the decline in oil prices.”

Mining and quarrying, which includes the oil sector, contributed only 2.2 per cent to Dubai’s economy last year. The biggest sector is wholesale and retail, with 29 per cent, followed by property, with 15 per cent.

“Expo 2020 and increased retail and tourism sector activity due to safe haven status will support the growth and counteract the negative impact of oil price,” Mr Eke said.

“In 2016, transport and communication as well as [the] tourism sector are expected to benefit the most.”

This bullish view of Dubai’s economy is supported by last month’s increase in private-sector business activity in the emirate to its highest level since March last year and the trough in February, according to data gathered by Emirates NBD.

The bank’s Dubai Economy Tracker Index, which tracks a number of non-oil private sector indicators, shows new sales wins and greater confidence among businesses and their clients meant the latest expansion of private sector output was above the index average since it began in 2010.

“Trade, transportation and communication, and financial services are likely to post healthy growth as well [as tourism], albeit more moderate through the remainder of 2016 before gathering pace in 2017,” said Bryan Plamondon, the director of Middle East economic analysis at IHS.

“Other sectors exposed to weaker growth include manufacturing, utilities and construction. Although these sectors should enjoy better prospects in 2017 as domestic and external conditions stabilise and improve.”

HSBC, however, has a more bearish view of the Dubai economy. “Weak growth in Dubai’s key service export markets should continue to weigh on demand,” said Razan Nasser, a senior economist for the Middle East and North Africa region at HSBC Middle East.

“The slowdown in global trade also continues to pull back the transport and logistics sectors and the dollar-driven dirham strength is still impacting the competitiveness of the leisure and retail industries, making it difficult to draw in investments, including into the real estate sector.”

Meanwhile, Expo 2020 should galvanise the economy in the next three years, once the projects related to the global exhibition start kicking in. IHS projects UAE’s non-oil growth to average 4.5 per cent between next year and 2020, partly thanks to the economic boost from the Expo.

“Looking further ahead, Dubai’s preparation to host Expo 2020 should provide a further engine for growth as projects are initiated, with the expo particularly important for the construction, transport, tourism and hospitality sectors,” Mr Plamondon said.

dalsaadi@thenational.ae

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Short-term let permits explained

Homeowners and tenants are allowed to list their properties for rental by registering through the Dubai Tourism website to obtain a permit.

Tenants also require a letter of no objection from their landlord before being allowed to list the property.

There is a cost of Dh1,590 before starting the process, with an additional licence fee of Dh300 per bedroom being rented in your home for the duration of the rental, which ranges from three months to a year.

Anyone hoping to list a property for rental must also provide a copy of their title deeds and Ejari, as well as their Emirates ID.

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House-hunting

Top 10 locations for inquiries from US house hunters, according to Rightmove

  1. Edinburgh, Scotland 
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  10. Tower Hamlets, London 

 

ESSENTIALS

The flights

Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.

The hotels

Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.

The tours

A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages. 

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Key recommendations
  • Fewer criminals put behind bars and more to serve sentences in the community, with short sentences scrapped and many inmates released earlier.
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  • Explore wider powers for judges to punish offenders by blocking them from attending football matches, banning them from driving or travelling abroad through an expansion of ‘ancillary orders’.
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Global state-owned investor ranking by size

1.

United States

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China

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UAE

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Japan

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Norway

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Canada

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Pool A Dubai Hurricanes, Bahrain, Dubai Exiles, Dubai Tigers 2

Pool B Abu Dhabi Harlequins, Jebel Ali Dragons, Dubai Knights Eagles, Dubai Tigers

 

Opening fixtures

Thursday, December 5

6.40pm, Pitch 8, Abu Dhabi Harlequins v Dubai Knights Eagles

7pm, Pitch 2, Jebel Ali Dragons v Dubai Tigers

7pm, Pitch 4, Dubai Hurricanes v Dubai Exiles

7pm, Pitch 5, Bahrain v Dubai Eagles 2

 

Recent winners

2018 Dubai Hurricanes

2017 Dubai Exiles

2016 Abu Dhabi Harlequins

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2014 Abu Dhabi Harlequins

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Biography

Favourite book: Zen and the Art of Motorcycle Maintenance

Holiday choice: Anything Disney-related

Proudest achievement: Receiving a presidential award for foreign services.

Family: Wife and three children.

Like motto: You always get what you ask for, the universe listens.

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The Bio

Amal likes watching Japanese animation movies and Manga - her favourite is The Ancient Magus Bride

She is the eldest of 11 children, and has four brothers and six sisters.

Her dream is to meet with all of her friends online from around the world who supported her work throughout the years

Her favourite meal is pizza and stuffed vine leaves

She ams to improve her English and learn Japanese, which many animated programmes originate in