Key sectors of the Dubai’s economy have shown growth in the first half of the year, top officials said on Tuesday.
Dubai, one of the seven United Arab Emirates, the OPEC producer’s trade and business hub is recovering from last year’s $25bn debt restructuring in its flagship company, Dubai World , after its 2009 standstill sent global markets reeling.
“The core business of Dubai is doing very well,” Sheikh Ahmed bin Saeed Al Maktoum, chairman of Dubai’s Supreme Fiscal Committee, told a news conference held to announce an upcoming financial forum.
He declined to say whether the emirate planned to inject more money into the Dubai Financial Support Fund, which was set up to support state-linked firms.
Dubai, which lacks the oil wealth of neighbouring Abu Dhabi, said in its updated government debt issuance programme earlier this month that $1.55 billion was left in the support fund.
The emirate, which is facing around $30bn in debt repayments over the next two years, said in May it could extend loans to more firms.
Sheikh Ahmed is also chairman of airline Emirates and debt-laden conglomerate Dubai World , and an uncle of Dubai’s ruler.
Dubai, whose debt pile is estimated at $113bn or 138 percent of its economic output, has been recovering this year helped by a pickup in trade flows and as investors flocked in amid social unrest in neighbouring countries.
“All the economic indicators are good,” Ahmed Humaid Al Tayer, another Supreme Fiscal Committee member and Chairman of Dubai International Financial Centre, told reporters.
“The sectors of trade, tourism, air transport, services, all have seen growth in 2009, 2010 and the first half of this year,” he said.
Dubai’s airport saw an 8.8 percent annual jump in passenger numbers to 3.97 million in May, its operator said on Tuesday. Hotel occupancy was up 8.7 percent at 81 percent in April, media have reported.
The emirate’s trade and property-focused economy expanded by 2.4 percent in 2010, when it was hit by Dubai World’s restructuring, after the same contraction in the previous year.
Despite recovery, banks still remain hesitant to lend across the UAE, the world’s No. 3 oil exporter, and the once-booming property sector is still weak in Dubai, known for ambitious projects such as the world’s tallest tower.
“They still have a major overhang, which is the real estate sector as well as growth of credit to the private sector,” said Mahdi Mattar, chief economist at CAPM Investment.
In May, the emirate, which accounts for 28 percent of the UAE economy, took control of Islamic lender Dubai Bank, owned by the private holding company of the Dubai ruler, to prevent the bank’s collapse.
“The real estate, of course, I mean there is no quick solution. It will take time,” Tayer said.