Dubai to target 4.5 percent growth in 2012

Dubai to target 4.5 percent growth in 2012

Dubai will aim for economic growth of 4.5 percent this year, up from an estimated expansion of more than 3 percent in 2011, a senior economic official said on Wednesday.

February 15, 2012 2:18 by Reuters

“The GDP of Dubai has witnessed growth of 2.5 percent in 2010 and it is expected to increase over 3 percent in the year 2011,” Sheikh Ahmed bin Saeed al-Maktoum, chairman of the Dubai Supreme Fiscal Committee, said during a presentation on the emirate’s economic outlook.

“And we hope in this year we will see more and can get to 4.5 percent.”

Dubai, much more dependent on non-oil trade than the rest of the United Arab Emirates, accounts for about 30 percent of the country’s gross domestic product. Analysts polled by Reuters in December forecast the overall UAE economy would grow 3.1 percent this year after an estimated 3.9 percent in 2011.

Sheikh Ahmed did not detail how Dubai aimed to reach 4.5 percent growth, but said the financial sector had remained strong despite challenges over the past few years, which included the global financial crisis and a corporate debt crisis in Dubai which required a bailout from neighbouring Abu Dhabi.

Earlier on Wednesday Emirates NBD, Dubai’s largest bank, posted a 62 percent fall in its fourth-quarter net profit as it made provisions against possible losses on loans to government-linked companies, many of them involved in the struggling real estate sector.

“The financial management of the Dubai government has taken policies that reduced expenses and put many controls on our budget,” Sheikh Ahmed said.

Mohammad Lahouel, chief economist at Dubai’s Department of Economic Development, told the same conference that the department expected economic growth of around 4.1 percent in 2012, after expansion of roughly 3 percent in 2011.

“We are expecting a growth rate of 4.1 percent in 2012. It is going to be driven by the respective sectors; tourism is going to continue to grow at a fast rate of 6 percent, trade at about 6 percent, manufacturing is going to be resilient at about 6 percent, and transportation,” he said.

“This rate will be achieved in spite of the continuous decline in the real estate sector.” (By Martina Fuchs and Praveen Menon)