Dubai yet to feel effects of economic slowdown

Dubai: The global financial crisis will have an impact on the economy in Dubai, but relatively solid local fundamentals are keeping the business community optimistic, a top official said on Wednesday.

Dubai Chamber of Commerce and Industry director general Hamad Buamin admitted that Dubai is not completely immune to the ills that plague the global financial markets, but the local business community has yet to feel the effects of the global slowdown. He noted that Dubai's trade this year alone remains robust, up 40 per cent compared to last year. Besides, Buamin added, businessmen in the UAE and the rest of the GCC region are also aggressively pursuing opportunities arising from the crisis.

Foreign direct investments are expected to continue pouring in, but with the introduction of a new law allowing ownership of UAE companies in certain sectors, investors' interest might divert from real estate and gear towards other business ventures like knowledge-based industries.

"The financial crisis will definitely have an impact here given that we're part of the global economy, but we still are optimistic and positive. So far, the outlook for this year is positive. Confidence in the economy is still reflected in the majority of the business community here," said Buamin during the launch of Oxford Business Group's annual business guide Titled "The Report: Dubai 2008".

Room for optimism

The report said the UAE's economy remains solid but its growth is actually slowing down. Econ-omists had predicted the decline due to dropping oil output as Opec slashed production last year. "2007 saw a marked slowdown in the UAE's economy. The GDP (Gross Domestic Product) of Dh698 billion represented a rise of just 7.4 per cent in real terms on the previous year," the report said.

Standard Chartered Bank earlier predicted the real GDP growth for 2008 to hit 6.5 per cent, averaging 7 per cent over the next five years. The forecast is lower than the 9-11 per cent growth seen in previous years. Oxford Business Group (OBG), however, said even a 6.5 per cent growth is no reason to complain about.

"Despite the decline, the country's economic fundamentals appear to remain solid and there is much room for optimism," the report added.