Dubai 2010 real GDP up 2.8 percent, beats estimate

Dubai 2010 real GDP up 2.8 percent, beats estimate

Economic growth up from June estimate of 2.4 percent; GDP shrank by 2.4 percent in 2009

September 25, 2011 10:03 by Reuters

Dubai’s economy expanded by 2.8 percent in real terms last year, faster than previously expected, as growth in trade and retail sectors helped the indebted Gulf Arab emirate recover from 2009 contraction, preliminary data showed on Sunday.

One of the seven United Arab Emirates, the OPEC producer’s trade and business hub, is recovering from last year’s $25 billion debt restructuring in its flagship company, Dubai World .

The emirate, which accounts for 28 percent of the UAE economy, previously estimated 2.4 percent gross domestic product growth in 2010, a prospectus to the government’s updated bond issuance programme showed in June.

Dubai’s economic output shrank by 2.4 percent in 2009 after the global financial crisis pierced its property bubble, freezing projects worth tens of billions of dollars.

In 2010, Dubai’s real GDP rose to 293.6 billion dirhams ($79.9 billion) after a downwardly revised 285.7 billion in the previous year, data from the Dubai Statistics Center showed. It previously reported output of 286.6 billion dirhams for 2009.

Dubai’s wholesale and retail trade sector, which accounts for a third of the emirate’s GDP, rose by 4.5 percent in real terms last year, while construction tumbled by 14.7 percent, the data showed.

Despite recovery, banks still remain hesitant to lend across the UAE, the world’s No. 4 oil exporter, and the once-booming property sector is still weak in Dubai, known for ambitious projects such as the world’s tallest tower.

The emirate, which lacks the oil wealth of neighbouring Abu Dhabi, is facing around $30 billion in debt repayments over the next two years. Its debt pile including state firms is estimated at $113 billion or 141 percent of GDP.

Analysts polled by Reuters in June expected the UAE economy to grow by 3.7 percent in 2011 after a 1.4 percent expansion last year helped by robust oil prices and strong trade flows. ($1 = 3.673 UAE dirhams) (Reporting by Martin Dokoupil; Editing by Ed Lane)