Dubai: Dubai is expected to attract higher foreign direct investment this year compared to 2013, buoyed by growth across sectors like services and logistics.
“The focus on growth [is] coming with mega projects that have been announced by the government,” said Fahad Al Gergawi, chief executive of Dubai FDI, the foreign investment office in the emirate’s Department of Economic Development (DED).
Al Gergawi said he expects foreign direct investment (FDI) in Dubai to grow by “10-15 per cent” this year over 2013. He declined to provide his forecast for 2015.
A year ago, Dubai won the bid to host the World Expo 2020, a six-month trade event that is expected to attract 25 million visitors. Dubai’s foreign trade is likely to touch Dh4 trillion by hosting the event.
The event could “open up investment opportunities for domestic and foreign firms alike,” according to the Business Year: Dubai 2014 report, released on Tuesday.
Projects worth Dh30 billion are expected to be built across Dubai to further enhance the emirate’s infrastructure in time to host the event.
The government has earmarked $1.73 billion for new infrastructure projects over the year, up 13 per cent year-on-year, as per the report.
Also, Expo 2020 is likely to create up to 100,000 new jobs over 2015-2021, and add 0.5-0.6 percentage points to gross domestic product (GDP). Dubai’s GDP grew by 4.6 per cent in 2013, with DED expecting that to rise by 4.7 per cent in 2014, according to the report.
Other indicators that are keeping investors interested are private consumption expected to rise at an average rate of 7.8 per cent until 2015, and retail sales likely to grow by 32.9 per cent to $41.1 billion in parallel.
Some of the sectors that have attracted investments include trade, services, aviation and logistics, Al Gergawi said. He anticipates a rise in investment in entertainment and hospitality projects.
The main countries investing in Dubai are the US, UK, India, Switzerland and Saudi Arabia, he said.
Last year, Dubai’s direct foreign trade amounted to $230.46 billion, up 4.7 per cent over 2012, according to the report. Of that figure, 64.4 per cent was accounted for by imports, 14.9 per cent by exports, and 20.7 per cent by re-exports. Dubai’s free zone and custom warehouse trade represented $131.58 billion of direct foreign trade.
Overall, the UAE’s FDI is expected to be valued at $14.4 billion in 2014, up 20 per cent from $12 billion in 2013.