Tourism and retail make Dubai's economy grow in 2016

Posted: 08-Aug-16 09:44

Analysts who have carefully studied Dubai's economic development throughout the present year state that the outlook for the rich Emirate is bright. Tourism and retail are the two main pillars that have made Dubai's economy grow in 2016. Travel, in particular, is expected to continue growing as the Emirate prepares for the 2020 World Expo.

Tourism and retail make Dubai's economy grow in 2016

Emirates NBD’s latest data indicates that rising tourism and retail industries pushed Dubai’s non-oil private sector to a 10-month high in June. In order to analyse each one of the key sources of income, the National Bank of Dubai used the Economy Tracker Index to execute a monthly reading based on indicators such as new orders, employment and inventories. All readings above 50 indicate expansion.

According to the study, the NBD concluded Dubai stood at 54.6 last month, indicating a slightly higher expansion rate than the previous month’s 54.5, although still below the trend of the past three years. The two main sectors on top of the list for the Emirate’s economic growth are the wholesale and retail sector with a reading of 58.2, followed by travel and tourism at 54.1 and the expansionary construction sector at 51.5. Unfortunately this economic rise was not accompanied by the desired improvement in employment.

The head of Middle East and North Africa research at Emirates NBD, Khatija Haque stated:

“The recovery in the travel and tourism sector last month is particularly encouraging as this sector had been relatively soft in previous months. However, we note that the expansion has not led to increased employment, suggesting that firms are becoming more efficient in their operations.”

Nonetheless, predictions about Dubai’s economic future remain optimistic, particularly in the travel and tourism field. Global information publisher providing market research reports and statistics on countries, Euromonitor, expects inbound trips to rise 39% over the next four years. Rabia Yasmeen, a Euromonitor analyst, said:

“A lot of growth is expected to come from Asian countries and less politically stable Arab countries, visits from friends and family, and shopping is one of the key leisure activity that tourists engage in."

However, Euromonitor has not released information on how Brexit could affect Dubai’s economy, particularly in the tourism sector, and its effect are not yet clear. Neighbour country Saudi Arabia, in return, would be one of the economies hit hard by the decision according to this entity.

As Dubai prepares to host the 2020 World Expo, solid advertising campaigns are put into place by the government to attract more visitors from around the globe. Many investments are also being made in infrastructure including the new metro extensions on the Red and Green Line in the intent of making transportation within the city more efficient.

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