Growth plans scaled down

Dubai: The Dubai Government is revising its growth vision and strategy, announced in 2007, downwards from 11 per cent year-on-year till 2015 to between four to six per cent, in line with the ground realities and following the global financial crisis, a top official said.

"Yes, we are currently revising the government's Dubai Strategic Plan 2015, downwards to four to six per cent from 11 per cent announced earlier," Nasser Bin Hassan Al Shaikh, director-general of Dubai Department of Finance, told the media yesterday.

In February 2007, Dubai Government unveiled its Vision or Dubai Strategic Plan 2015, aimed at maintaining a double-digit economic growth to $108 billion gross domestic product (GDP) and increase real per capita GDP to $44,000 by 2015. Dubai's GDP in 2007 is estimated to have touched Dh301 billion, Al Shaikh said.

The emirate, which witnessed a massive growth over the last six years averaging 13 per cent, was on a roller-coaster ride led by the real estate and construction sector. Under those circumstances, the growth target was easily achievable.

However, the scenario has changed over the last six months drastically as most developers have been hit by tight liquidity situation.

"That type of growth will be difficult to achieve under the current circumstances. We have to be realistic. We are assessing the situation and will be able to finalise in two to three months," Al Shaikh said.

Real Estate and trading are the two major contributors to the emirate's GDP, Al Shaikh said.

"Trading contributes 30 per cent to Dubai's GDP, followed by the real estate. For the past few years, our major focus has been the real estate," he said.

"Last year, 27,000 housing units were delivered while this year, we expect between 32,000 to 34,000 to be supplied. However, the Real Estate Regulatory Authority (Rera) is formulating the data on the housing market.

"Rera will issue it in the first quarter of this year, followed by a quarterly update on a regular basis."

The contribution of oil to Dubai's GDP has declined to 4 per cent, reflecting a strong shift in the emirate's diverse economy.

Al Shaikh said the government has calculated the budget at $45 per barrel, much lower than other Gulf states, who have factored this at $55 per barrel.

"Our GDP is estimated to have reached Dh301 billion last year," he said. "Oil represents 4 per cent of the GDP." At this rate, oil is expected to fetch the government a little more than Dh12 billion.