Official data showed that Dubai’s economic growth slowed during the year 2018, affected by the decline in major activities, especially real estate, tourism, and shipping. The Dubai Statistics Center (DSC) avoided showing the comparative figures for 2017 because of the decline in growth rates.
The Dubai Statistics Center said in a statement posted on its website that the gross domestic product at constant prices of the emirate amounted to 398.1 billion dirhams ($108.5 billion), a growth of 1.94 percent.
However, data from Emirates Lakes show Dubai’s growth of 2.8 percent in 2017, indicating a marked slowdown in growth over the past year, the center did not show these rates, as it also recorded the weakest pace since its contraction in 2009 when the economy faltered due to the debt crisis.
Arif Al Muhairi, Executive Director of the Dubai Statistics Center, said: “competitiveness of Dubai’s markets and the efficiency of its economy have stimulated the demand and reflected positively on the productivity of its various economic sectors and pushed the wheels of economic growth to reach nearly 2%.”
Al-Muhairi pointed out that the growth of real estate activity by 7% in 2018, contributing about 25% of the growth achieved during the year. However, the 2017 data show that real estate activity grew by 7.3 percent.
Transport and storage section grew by 2.1 percent in 2018, while the Statistics Center did not report growth of 4.5 percent the year before.
According to Al Muhairi, “the transport and storage sector plays a vital role in Dubai’s economy given that it is highly related to all economic sectors, as it supports various economic activities by providing the transport and logistics services to all. In addition to its close connection with the tourism sector.”
Accommodation and hotel services, hotels and restaurants, grew by 4.5% in 2018 while data show that their growth rate was 8% in 2017.
In February, Standard & Poor’s, a global credit rating agency, predicted that the real estate sector in Dubai will continue to be weak in 2019 due to the supply and demand gap, noting that property prices and rents have declined between 25 and 33 percent since 2014.
The real estate crisis has hit banks, facing a catastrophic fate as rising signs of financial stalemate and debt defaults mount. In mid-January, Bloomberg reported that UAE banks were cracking down, expecting to resort to mergers, to maintain their competitiveness.