Dubai’s economy looks set to expand by an estimated 3.3% in 2017, according to forecasts from the IMF, up from 2.9% in 2016 and well above the organisation’s projections for the wider UAE economy of 1.3%. Solid increases in foreign trade and infrastructure investments have been major drivers of growth.
Data issued by the Emirates NBD Dubai Economy Tracker Index at the beginning of November point to heightened activity in the later part of the year across key sectors of the economy, including construction, which posted its highest output growth for two years in October, and retail.
The index had reached 55.6 points by the end of October, up from 55.2 in September, and well above the 50-point cut-off that marks the difference between growth and contraction, putting Dubai on course to finish 2017 on a high.
The upwards trajectory is expected to continue into 2018; the IMF has forecast GDP growth of 3.5% for the year, supported by an anticipated rebound in energy prices and general business activity in the region.
Building works a major contributor to growth
Growth in the construction sector is being supported by a combination of projects for Expo 2020 and solid activity across the residential component of the industry.
According to a report prepared for Dubai’s annual construction industry fair, The Big Five, held at the end of November, around $8bn has been invested in transport and infrastructure projects related to the expo, while works at the site itself are valued at between $2bn and $4bn.
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