|Published:||4 Oct at 6 PM|
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is rushing to court investors as its economy tanks.
Weakening trade, tourism and property sales are threatening the Gulf States’ most diverse economy, with its growth now regarded as ‘lacklustre’ by economic experts. Last year, real estate deals fell some 21 per cent, with tourism figures remaining at around 16 million since 2017. Consumer spending in the city-state is also subdued, with the triple whammy resulting in just 1.9 per cent growth. The growth figure is half that of 2017 and point 4 per cent more than during 2010 when Dubai was suffering from debt problems and the effects of the 2008 financial crash.
Over the past year, Dubai has attempted to repair its image as a Middle Eastern economic hub by introducing incentives for investors, expat professionals and tourists, but nothing seems have prevented its continuing fall from grace. Its comparatively open market leaves it vulnerable to global trade tensions, the Iranian economic downturn and other regional slowdowns, with its manufacturing sectors and tourism worst affected to date. Incentives include long-term visas for investors from overseas, talented expats and students, full expat ownership for businesses and even permanent residency for high net worth investors.
Dubai’s population is around 3.3 million, with expats making up over 90 per cent of the total and contributing to the economy via taxes and fees for certain transactions. Government company profits also help the economy, with just six per cent of government revenue sourced from oil. Reports from last week’s Dubai Investment Week suggest the economic slowdown is just one of many in the past, with the city-state still scoring in the top three world cities for foreign direct investment. The government is hoping the huge sums used to host Dubai Expo 2020 will bear fruit in even more overseas investment as well as tourism spends, with more reforms aimed at boosting the economy expected to kick in next year.
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