Dubai: Projected short-to-medium term economic activity in Dubai indicates a real gross domestic product (GDP) growth of 2.1 per cent this year, 3.2 per cent in 2020 and 3 per cent in 2021, according to a report from Government of Dubai.

While the Fifty Years Charter, government Initiatives and increase in productivity continue to support economic expansion in Dubai, a government statement said, looking ahead, EXPO 2020 and its legacy will continue to be major drivers of the Emirate’s efforts at diversification and sustainable growth

“The comprehensive development vision of His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has made Dubai an attractive environment for investment and enabled the city to make major economic and developmental strides. This has strengthened Dubai’s global indicators, including in education, health, women’s empowerment and competitiveness,” said Shaikh Hamdan Bin Mohammad bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council of Dubai.

Shaikh Hamdan lauded the policy of openness in Dubai and the support extended to innovative projects and entrepreneurship, which has made the city an ideal investment destination at a regional level and a gateway to promising regional markets, he noted the key role played by government initiatives and investments, as well as the Expo 2020 projects, in promoting growth and supporting greater productivity and investor confidence in the Dubai economy.

Growth despite headwinds

The Government of Dubai took decisive action in the second half of 2018 to accelerate the rate of economic growth in the Emirate which saw the economy maintaining resilient growth despite some headwinds.

“Major policy initiatives were introduced and contributed to bolstering domestic demand, reducing the cost of doing business, boosting SME liquidity, and supporting the tourism and real estate sectors. Inflows of foreign direct investment (FDI) into Dubai also accelerated and reached Dh38.5 billion in 2018, an increase of 41 per cent over its 2017 level. These contributed to accelerating growth in the second half of 2018 to 2.2 per cent, up from 1.7 per centin the first half of 2018, resulting in overall real GDP growth in 2018 of 1.9 per cent,” sad Sami Al Qamzi, Director General of Dubai Economy.

GDP growth in 2018 was also supported by growth in productivity, which increased by 2 per cent in 2018 over its 2017. Data showed the stock of capital, or investments net of depreciation, increased by an average of 4.2 per cent per year, reflecting business investments in machinery and equipment, and also the government’s investments in infrastructure making Dubai the 5th ranked city worldwide in terms of its quality of infrastructure, according to the 2018 World Economic Forum Global Competitiveness Report.

Human capital, which is measured by the average number of years of schooling weighted by the returns to the different levels of education, also contributed to the increase in labour productivity in Dubai. The impact of government policy initiatives continues to support growth in productivity and business and consumer confidence, stimulating economic expansion in Dubai this year and beyond.

While the government has factored in some of the future challenges, it has initiated a set of balanced, integrated, and flexible policy initiatives that is expected to accelerate development and ensure sustainability and prosperity in the Emirate.