Dubai economy grew 2.3 pct in first half
Debt worries remain a key concern.
November 24, 2010 4:08 by Reuters
Dubai’s economy grew 2.3 percent in the first six months of 2010 as trade and manufacturing improved along with tourism, the Dubai Statistics Center said, confirming earlier remarks by its chief.
The global crisis ended an oil and real estate-led boom in the United Arab Emirates last year, sending the world’s No. 3 oil exporter into its first downturn since 1993. Dubai’s debt woes have weighed on the economic recovery in 2010.
“The sectors of manufacturing, transport, logistics, services, wholesale and retail trade, hotels, restaurants and government services achieved positive growth,” Arif Obaid al-Muhairi was quoted as saying on the website of the daily Emirates 24-7.
He did not say whether the gross domestic product increase was in real or nominal terms.
The property sector contributed 11 percent to the Gulf emirate’s economy in the first six months, Muhairi said, down from 14 percent for whole of 2009, and 17 percent in 2008.
Dubai’s non-oil exports and re-exports soared by 46 percent and 26 percent, respectively, in the second quarter, while imports jumped 17 percent, data has showed.
Muhairi predicted last month Dubai’s GDP growth at 2.3 percent for 2010, well above a 0.5 percent forecast by the International Monetary Fund.
In February, when uncertainties around indebted state firm Dubai World weighed on the market, the IMF said it saw Dubai’s GDP contracting 1.3 percent in 2010.
The economy of the emirate, which accounts for some 80 percent of the UAE non-oil trade, expanded 5.7 percent in real terms in 2008. Official 2009 GDP data for Dubai are not available, although the IMF estimates a 0.9 percent contraction.
Concerns about Dubai’s liabilities, estimated at around $115 billion, have eased after Dubai World reached a deal in September to restructure almost $25 billion of debt.
But worries still persist about the debt pile owed by key firms such as Dubai Holding . Dubai and its firms face some $30 billion worth of debt maturing in 2011-2012.
Overall UAE credit growth remains anaemic due to bank exposure to Dubai debt, and is the main reason that leaves the OPEC country’s economy trailing its Gulf oil-exporting peers.
(Reporting by Martin Dokoupil; Editing by Kim Coghill)