Dubai lim­its virus im­pact on econ­omy

Fares bet­ter than ma­jor economies as GDP dips 3.5%, less than IMF forecast

Gulf News - - FRONT PAGE - Gulf News Re­port

The im­pact of the cri­sis on Dubai in the first quar­ter was less com­pared to some of the world’s ma­jor economies, ac­cord­ing to the fig­ures re­leased by the Dubai Statis­tics Cen­tre yes­ter­day.

Dubai’s GDP (gross do­mes­tic prod­uct) recorded a 3.5 per cent dip in the first three months of the year. The In­ter­na­tional Mon­e­tary Fund (IMF) pro­jected a 4.9 per cent de­cline in the global econ­omy this year.

So, the im­pact of the cri­sis on Dubai in the first quar­ter was “less com­pared to some of the world’s ma­jor economies”, the Dubai Statis­tics Cen­tre said

Arif Al Muhairi, Ex­ec­u­tive Di­rec­tor of DSC, said: “It was ex­pected that in the first quar­ter of 2020 the econ­omy will ex­pe­ri­ence a de­cline due to the global im­pact of the Covid-19 pan­demic. “Be­ing a cen­tral player in in­ter­na­tional trade and a vi­tal global pas­sen­ger tran­sit hub, Dubai’s econ­omy was af­fected by these ex­cep­tional cir­cum­stances.

“The world­wide re­stric­tions on move­ment for in­di­vid­u­als through air, sea, and land en­try points, as well as the un­prece­dented in­ten­si­fi­ca­tion of pre­cau­tion­ary mea­sures, had sig­nif­i­cant reper­cus­sions on in­ter­na­tional trade and the global econ­omy.”

Dubai’s GDP (gross do­mes­tic prod­uct) recorded a 3.5 per cent dip in the first three months of the year, just as the econ­omy started show­ing the first signs of the Covid-19 pan­demic.

Even then, the im­pact of the cri­sis on Dubai in the first quar­ter was “less com­pared to some of the world’s ma­jor economies”, the Dubai Statis­tics Cen­tre states.

The trade and trans­port sec­tors felt the brunt of the first quar­ter 2020 slow­down, as did trade­fac­ing ware­hous­ing and lo­gis­tics. Trad­ing ac­tiv­ity con­tracted 7.5 per cent in the first quar­ter — but re­tained its “sta­tus as the largest con­trib­u­tor to the econ­omy, with 23 per cent of GDP.

A gain for the gov­ern­ment

Trans­port and lo­gis­tics were down 5.5 per cent, but still con­trib­uted 12.1 per cent of GDP.

“While the sec­tor ben­e­fited from the sig­nif­i­cant de­cline in op­er­at­ing costs, such as avi­a­tion fuel cost, the de­cline was not enough to make up for the dip in rev­enues,” the state­ment added. Last year, Dubai’s 2019 GDP growth was led by trad­ing, which was up 2.7 per cent. It con­trib­uted 26.6 per cent of GDP

In­ter­est­ingly, the pub­lic sec­tor eked out a 0.6 per cent growth in the first three months over first quar­ter 2019. It now makes up 5.1 per cent of the broader econ­omy.

“The role played by the pub­lic sec­tor was sig­nif­i­cant in mit­i­gat­ing the im­pact of the global eco­nomic cri­sis ex­pe­ri­enced in Q1-2020,” the gov­ern­ment said in the state­ment.

The health care sec­tor, which was at the very cen­tre of af­fairs, ac­tu­ally de­clined 3.7 per cent be­tween Jan­uary to end March, “due to the need to al­lo­cate the ma­jor­ity of health re­sources to com­bat­ing the pan­demic.

An­tonin Kélian Kal­louche/ Gulf News

Shop­pers at Mall Of The Emi­rates in Dubai.

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