mirate expected to grow over 4% in the next one year as economic activity gains momentum
Dubai is all set to reap the benefits of six-month-long Expo 2020 as the countdown for the mega event starts today.ADVERTISING
The emirate is expected to grow over 4 percent in the next one year as economic activity gains momentum, which will benefit the construction, interior fit-outs, banking, hospitality, aviation, event management, and F&B sectors, analysts said.
“As a result of strong economic activity directly linked with Expo 2020, Dubai’s economy is expected to grow over 4 percent in addition to creating around 70,000 jobs for the mega event,” they said.
The big event, which is just one year away, is likely to attract 25 million visitors and an estimated $7 billion (Dh25.7 billion) worth of investment in the construction sector. It will run from October 20, 2020, to April 10, 2021.
According to official figures, Dubai’s economy grew by 1.9 percent in 2018. Its GDP could experience a boost of 0.5-1 percent in the next 12 months due to economic activity associated with Expo 2020.
S&P Global Ratings expects Dubai’s economy to grow by about 2.5 percent a year between 2019 and 2022. The IMF has projected a 2.8 percent growth in 2019 and 3.3 percent in 2020 for the emirate. It is estimated that Expo 2020 will account for as much as 2.5 percent of Dubai’s GDP during its run.
MR Raghu, managing director of Marmore Mena Intelligence, noted that the construction sector would be the obvious first choice here. “On-site construction, supporting infrastructure and ancillary developments to improve public transportation are already underway in anticipation of millions of tourists. The real estate market could see further recovery, as speculation of higher demand would help attract investments and drive higher prices.
“With close to 25 million visitors expected to visit the country, the hospitality and tourism sector would benefit the most. The influx of visitors will help fuel demand for hotel accommodations, food and beverages, and leisure activities. The retail industry would also flourish along with logistics companies so as to ensure a smooth flow of products and services to meet heightened demand. This would also raise the demand for warehousing and storage facilities as well. Events organization and business services would also benefit greatly as large scale events are organized to attract the attention of investors from all across the globe,” Raghu added.
He cautioned that the challenge, however, for the hospitality, leisure and retail sectors would be to sustain business beyond Expo 2020.
Mohammed Azhar Sajan, director of Casa Milano, said with Expo 2020, there is a strong demand for high-level and medium-level products both for B2B and B2C.
“We are expecting good market even beyond 2020 and not solely relying on Expo because history says that cities grow after such events because people visit the city and invest later,” Sajan said after the launch of their new high-end interiors brand Casa Milano.
“In addition, there is a big-scale construction happening in high-end areas such as Emirates Hills, Meadows and Springs. also, people from India and Pakistan find Dubai a better place for such products because the duty here is lower than they pay in their home countries,” he said.
“I think people who are willing to pay will not compromise on quality. Considering Expo around the corner, this is the right time to target the high-end market. Since projects are nearing completion, there will be a lot of influx of visitors and demand for interior fit-outs,” he added.
Source: Khaleej Times