Dubai: “The economy of Dubai is expected to grow 2-3% in 2010 after contracting about 2% this year due to slowing real estate and construction sectors,” Sami al-Qamzi, the head of the economic development department of Dubai was quoted as saying on Friday.
Qamzi told the state television that the economy shrank 1.47% in the first half of 2009, al-Ittihad and al-Khaleej newspapers reported.
“This year’s slowdown will be partly offset by a 9.1% growth in the financial sector and a 5.9% expansion in the consumer goods industry,” Qamzi added.
Dubai, which enjoyed years of stellar property-fuelled growth until the end of 2008, alarmed global markets on 25 November when its asked for a repayment freeze on billions of dollars worth of debt issued by state-owned conglomerate Dubai World.
The issue raised concerns about the economy of the regional trade and business hub, one of seven members in the United Arab Emirates federation.
The federation’s economy was seen rising 2.9% next year, after a 1.1% contraction in 2009, well below a nearly 8% average expansion in the previous three years, a Reuters poll showed ahead of Dubai’s debt announcement.
Dubai’s property boom was brought to a grinding halt after the global financial crisis hit the market of the emirate’s major developments that include man-made islands.
Developers in the emirate delayed or cancelled developments worth tens of billions of dollars, a move that weighed on the construction and mortgage sectors.
Qamzi was reported as saying the Dubai economy may grow by as much as 5% in 2011.
Earlier this month, a senior official at the International Monetary Fund (IMF) said that it might revise its growth forecast for the UAE’s non-oil gross domestic product to ‘significantly lower’ than the 3% it had projected in October.
Abu Dhabi is the UAE’s largest member and is the main oil producers in the country, the world’s third-largest oil exporter.