No one could have predicted what the long-term effects of the pandemic were, but as we move further away from the height of the virus’ hold, I’m keen to know how Dubai’s economy will fare.
The analysis and economic indicators all point to solid growth. While Dubai Statistics Center (DSC) reported a 10.9% contraction in the city-state’s economy year-on-year in 2020, most pundits agree that 2022 will see a gradual uptick in economic activity, with DSC analysis suggesting a 3.4% uptick in growth next year.
Meanwhile, research firm Fitch Solutions puts UAE growth next year at a conservative 3.7%, revising it down (from a 4.1% 2022 forecast) in light of the global impact of new variants of COVID-19.
While its research suggests the ongoing COVID-19 virus might dampen growth, it equally expects the UAE economy to be bolstered by increasing visitor numbers and strong domestic demand.
A Fitch analyst said: “We expect real GDP growth to accelerate…in 2022 due to stronger hydrocarbon output, a sustained recovery in tourism activity and resilient domestic demand.”
After a concerted effort to control the virus, Dubai became one of the first cities in the world to re-open to tourists (In July 2020), perhaps underlining its incredible efforts to stamp out the virus while underlying its strong economic reliance on tourism, leisure and entertainment.
As expected, Expo 2020, the winter weather and the rapid rollout of vaccinations has led to a notable surge in tourism as we approach year-end.
Real Estate
After a slow decline of many years, the real estate sector is seeing a strong rebound.
In a recent report, S&P Global Ratings said residential property prices in Dubai: “have been rebounding strongly from a record low at end-2020 — since the peak in 2014 — on the back of pent-up demand from both international and local buyers, improved investor and consumer sentiment, a rebound in oil and gas prices, and gradual macroeconomic recovery, which in Dubai has been supported by high Covid-19 vaccination rates and new visa and corporate ownership rules.”
S&P analysts predict GDP growth of 3.5% in 2021 and 2.5% in 2022, after a record contraction in 2020 – experienced all over the world.
But they suggest there will be sustained momentum in tourism – which they also put down to Expo2020.
S&P also cites the raft of new residence visas, including for remote work and retirees, as a catalyst for “population and investment growth over the longer term.”
With this steady, organic growth in mind, I felt the time was right to launch a luxury property company, AHS Properties, which offers very high-end, exclusive properties in some of the city’s best locations.
The company will attract interest from foreign investors, but we hope our portfolio will also appeal to those already living here in Dubai.
My faith in Dubai’s wise leadership, cautionary, planned economic growth and drive for success underlines my commitment in the new venture.
In some very small ways, I hope that the new venture will help bolster the nation’s economic growth.
Given the gradual return to ‘normality’, most analysts see steady organic growth in Dubai and the UAE for next year.
Expo 2020, while delayed for a year, has brought a host of tourists and business opportunities that will reach far into the future.
Thanks to careful strategising, I’m excited to see the Expo2020 site develop into District2020, a fantastic, master planned community, that will ensure the positive economic effects are not a temporary bubble.
