Dubai growth expected to accelerate from 2.9% in 2016 to 3.2% in 2017 and 3.5% in 2018.
Dubai has been ranked among the world's top most-visited cities and secured sixth place after Hong Kong, Bangkok, London, Singapore and Macau by Euromonitor International in its top 100 city destinations rankings.
Diversification has put the Dubai economy on road to progress and the emirate will outperform the rest of the Gulf countries by sustaining strong growth in gross domestic product (GDP) in 2017 and 2018, according to a latest report.
Institute of International Finance (IIF) said Dubai has performed relatively well due to its diversified economy. Tourism, retail trade and transport will continue to be the key driver of its economic growth.
"We expect growth to accelerate from 2.9 per cent in 2016 to 3.2 per cent in 2017 and 3.5 per cent in 2018," said Garbis Iradian, chief economist for Middle East and North Africa at IIF.
The IIF growth forecast is in line with the International Monetary Fund (IMF), which said Dubai will record 3.2 per cent growth this year compared to 2.8 per cent in 2016. "Dubai economy is moving at relatively good speed due to investment in infrastructure projects led by Expo 2020 developments," Jihad Azour, director of the IMF's Middle East and Central Asia Department, said recently at a media briefing in Dubai.
Infrastructure spending is a prime focus of Dubai government as it registered 27 per cent year-on-year increase in 2017 due to allocations of more funds towards Expo 2020 projects. It is accounted for 17 per cent of total expenditures this year, reflecting the emirate's concern for the gradual implementation of Expo 2020 developments, according to analysts.
"With the government focus on the Expo 2020, there will be additional government spending which in turn will provide lubrication to the economy. Being a stable and peaceful country in the region, the UAE in general and Dubai in particular, are seen as an investment destination in the region," Atik Munshi, senior partner at Crowe Horwath - UAE, said.
About the economic growth outlook, he said it is not surprising that the IMF and other international organisations have predicted a higher growth for Dubai GDP backed by the non-oil revenue. He said the main thrust will actually come from the implementation of value-added tax, which is expected to provide a boost to the government exchequer.
"Real estate and construction, which is one of the major sectors for Dubai has also fared better and the same is expected to continue in 2018. I personally feel that the Dubai GDP will be in excess of 3.5 per cent in the next year," Munshi told Khaleej Times.
Dubai Economy also forecasts that the emirate's GDP will grow at 3.1 per cent this year and 3.6 per cent in 2018 as it pursuits diversification policy to reduce reliance on trade and trade and focus more on real estate, manufacturing and tourism.
Richard Stolz, head of corporate development at grmc Advisory Services, said Dubai's tourism sector is ever growing in terms of tourist volumes visiting the city.
"For the first nine months of 2017 Dubai's visitor number grew by 7.5 per cent over the same period last year to a total of 11.58 million overnight visitors. The steady growth in this sector can certainly be regarded as one of the contributors to Dubai's growing GDP," Stolz told Khaleej Times.
Dubai has been ranked among the world's top most-visited cities and secured sixth place after Hong Kong, Bangkok, London, Singapore and Macau by Euromonitor International in its top 100 city destinations rankings. It is expected that the number of foreign visitors to emirate will reach 16.56 million in 2017 as compared to last year's 14.9 million, an increase of 11.2 per cent - the highest growth in the top 10 cities.
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