Dubai's economy is well-positioned for its next cycle of growth, marked by an increasing shift from building physical infrastructure to a focus on “soft infrastructure” to further reduce barriers to doing business, according to the emirate's largest lender.
Trade, domestic manufacturing, e-commerce, a recovering real estate market and a rebounding tourism sector are also essential for the long-term economic potential of the emirate, Emirates NBD said in a research note on Wednesday.
“Dubai’s economy is well positioned to successfully transition on to the next phase of its economic cycle. Capacity uptake will be a key measure of that success,” it said.
“We will see an increasing shift from physical infrastructure build-up to policy measures that hone and deliver on the 'soft infrastructure' needed to support the emirate’s long term growth strategies.”
Dubai's non-oil private sector economy continued to grow in January, albeit at a softer pace, driven by an increase in new orders and boost in output despite Omicron headwinds.
The emirate's seasonally adjusted IHS Markit Purchasing Managers' Index reading stood at 52.6 in January, down from 55.3 in December, but the index was above the 50 neutral mark for the 14th consecutive month, indicating a solid upturn in business conditions across the non-oil private sector. A reading above 50 indicates economic expansion, while one below points to a contraction.
The emirate's economy grew 6.3 per cent year-on-year in the first nine months of 2021, underpinned by a strong rebound in hospitality, trade and real estate sectors, according to preliminary data from the Dubai Statistics Centre.
Emirates NBD estimates Dubai’s economy grew around 5.5 per cent for the full year 2021 — an upward revision from its earlier forecast of 4 per cent. With slower global growth, higher interest rates and a stronger US dollar, the lender expects growth of 4 per cent to 4.5 per cent in 2022.
Inflation in Dubai is expected to accelerate this year to more than 2 per cent, after several years of declining prices driven by falling rents, it said.
Dubai’s investment in trade-enabling infrastructure, such as its seaports and airports, allows it to be a crucial East-West trans-shipment point, similar to trade-based economies like Singapore and Hong Kong, which is important for post-pandemic recovery, it said.
In terms of local manufacturing, Dubai's policies will “drive the path forward for that sector as a critical part of the emirate’s economic diversification”, the research paper noted.
“The emirate sees that developing its manufacturing sector will be an important element in reducing economic vulnerabilities especially to external shocks such energy price volatility, which is a key goal of economic diversification,” it said.
“It also makes the economy more self-reliant and reduces dependence on imports, which is positive for its long-term trade dynamics.”
An important focus will be on so-called “industries of the future” — including space, biotech, HealthTech and other sectors driven by Fourth Industrial Revolution technologies.
“Regulatory framework will be key,” it said, referring to positive recent policies such as allowing the full foreign ownership of companies and the easing of SME funding.
“Dubai is well positioned to capitalise on those longer-term national industrial plans, particularly given its logistics and overall infrastructure readiness,” the report said.
Dubai's property market performed well in 2021, with apartment and villa sales prices showing their first yearly increase since 2014.
“We see the improvement in sales and rents of both residential apartments and villas as a sign of stabilisation after a multi-year decline,” the report said.
In the office space, while the omicron variant might dampen some of that recovery, the medium and long-term outlooks “strongly point to a return-to-office agenda, as businesses more comfortably adapt to the dynamics of the virus".
Higher interest may pose some challenges, although the impact on mortgage demand will be “moderate” at least into the 2022 rate hike cycle.
“An unexpected adverse evolution of the virus, and any related restrictions are headwinds to the market outlook,” the bank said.
Another sector that has rebounded in the emirate is tourism.
“While headwinds from the latest Covid variant continue to cloud the outlook for the global tourism sector, a focus on the correct set of policies that reduce risks and keep the doors open for tourists, in addition to leveraging on its high-quality travel infrastructure, will allow Dubai to chart a determined path to toward normalisation,” Emirates NBD said.
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
The biog
Born: Kuwait in 1986
Family: She is the youngest of seven siblings
Time in the UAE: 10 years
Hobbies: audiobooks and fitness: she works out every day, enjoying kickboxing and basketball
THE SPECS
Engine: 3.5-litre supercharged V6
Power: 416hp at 7,000rpm
Torque: 410Nm at 3,500rpm
Transmission: 6-speed manual
Fuel consumption: 10.2 l/100km
Price: Dh375,000
On sale: now
Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
If you go...
Flying
There is no simple way to get to Punta Arenas from the UAE, with flights from Dubai and Abu Dhabi requiring at least two connections to reach this part of Patagonia. Flights start from about Dh6,250.
Touring
Chile Nativo offers the amended Los Dientes trek with expert guides and porters who are met in Puerto Williams on Isla Navarino. The trip starts and ends in Punta Arenas and lasts for six days in total. Prices start from Dh8,795.
Brief scores:
Toss: Australia, chose to bat
Australia: 272-9 (50 ov)
Khawaja 100, Handscomb 52; Bhuvneshwar 3-48
India: 237 (50 ov)
Rohit 56, Bhuvneshwar 46; Zampa 3-46
Player of the Match: Usman Khawaja (Australia)
Player of the Series: Usman Khawaja (Australia)
Women%E2%80%99s%20Asia%20Cup
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Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
Roger Federer's 2018 record
Australian Open Champion
Rotterdam Champion
Indian Wells Runner-up
Miami Second round
Stuttgart Champion
Halle Runner-up
Wimbledon Quarter-finals
Cincinnati Runner-up
US Open Fourth round
Shanghai Semi-finals
Basel Champion
Paris Masters Semi-finals
UAE currency: the story behind the money in your pockets
Zayed Sustainability Prize
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
UAE currency: the story behind the money in your pockets
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Overall head-to-head
Federer 6-1 Cilic
Head-to-head at Wimbledon
Federer 1-0 Cilic
Grand Slams titles
Federer 18-1 Cilic
Best Wimbledon performance
Federer: Winner (2003, 2004, 2005, 2006, 2007, 2009, 2012)
Cilic: Final (2017*)
The President's Cake
Director: Hasan Hadi
Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem
Rating: 4/5
RACECARD
6pm Emaar Dubai Sprint – Conditions (TB) $60,000 (Turf) 1,200m
6.35pm Graduate Stakes – Conditions (TB) $100,000 (Dirt) 1,600m
7.10pm Al Khail Trophy – Listed (TB) $100,000 (T) 2,810m
7.45pm UAE 1000 Guineas – Listed (TB) $150,000 (D) 1,600m
8.20pm Zabeel Turf – Listed (TB) $100,000 (T) 2,000m
8.55pm Downtown Dubai Cup – Rated Conditions (TB) $80,000 (D) 1,400m
9.30pm Zabeel Mile – Group 2 (TB) $180,000 (T) 1,600m
10.05pm Dubai Sprint – Listed (TB) $100,000 (T) 1,200m
UK’s AI plan
- AI ambassadors such as MIT economist Simon Johnson, Monzo cofounder Tom Blomfield and Google DeepMind’s Raia Hadsell
- £10bn AI growth zone in South Wales to create 5,000 jobs
- £100m of government support for startups building AI hardware products
- £250m to train new AI models
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
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The Perfect Couple
Starring: Nicole Kidman, Liev Schreiber, Jack Reynor
Creator: Jenna Lamia
Rating: 3/5
HIV on the rise in the region
A 2019 United Nations special analysis on Aids reveals 37 per cent of new HIV infections in the Mena region are from people injecting drugs.
New HIV infections have also risen by 29 per cent in western Europe and Asia, and by 7 per cent in Latin America, but declined elsewhere.
Egypt has shown the highest increase in recorded cases of HIV since 2010, up by 196 per cent.
Access to HIV testing, treatment and care in the region is well below the global average.
Few statistics have been published on the number of cases in the UAE, although a UNAIDS report said 1.5 per cent of the prison population has the virus.
TO%20CATCH%20A%20KILLER
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About Krews
Founder: Ahmed Al Qubaisi
Based: Abu Dhabi
Founded: January 2019
Number of employees: 10
Sector: Technology/Social media
Funding to date: Estimated $300,000 from Hub71 in-kind support
The specs
Engine: 3.8-litre twin-turbo flat-six
Power: 650hp at 6,750rpm
Torque: 800Nm from 2,500-4,000rpm
Transmission: 8-speed dual-clutch auto
Fuel consumption: 11.12L/100km
Price: From Dh796,600
On sale: now
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
How to help
Send “thenational” to the following numbers or call the hotline on: 0502955999
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SPECS
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