Promising Second Quarter Results for the Dubai Economy
According to a report issued by the Department of Economic Development (DED), investor confidence has continued to grow in Dubai. In comparison to the first four months of 2018, there has been a 35 percent increase in new business licenses issued in the city in 2019.
“The DED has adopted new strategies and innovative approaches in line with the eight principles of the Fifty-Year Charter of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai,” noted Sami Al Qamzi, Director General, DED during a press conference after the release of the DED report on 15th June. He further added, "The DED has already taken steps to implement the terms of the Charter, specifically to strengthen Dubai's position as a global business and investment destination." Al Qamzi also mentioned that the DED is in the process of finalising the project to establish a virtual commercial city. This is an unprecedented attempt wherein licenses will be granted without the necessary residency in Dubai and adhering to the highest international legal standards.
The Dubai FDI Monitor of the Dubai Investment and Development Agency released data which showed a total of AED22.2 billion in FDI inflow into Dubai during the last quarter. This is an increase from AED7.3 billion in 2018, which is remarkable. There will be more opportunities for a higher FDI inflow in the next few years as Dubai comes closer to the EXPO 2020.
Another industry which is showing drastic growth is the Tourism sector with a 2.2 percent increase in arrivals in the last quarter. Dubai hotels have also registered a higher average occupancy rate of 79 percent which is a jump from 77 percent in 2018.
A welcome statistic is that the inflation rate has decreased to -3.72 percent when compared to a 2.27 percent increase in the same period last year, according to the Dubai Statistics Center.
The year 2018 saw the implementation of VAT in Dubai, and it inevitably led to a little inflationary pressure. However, this also resulted in a much-needed push for the competitive nature of Dubai and consumer spending on goods and services.
Small and Medium Enterprises have registered huge growth thanks to the implementation of VAT. With an estimated growth of 2.1 percent in 2019 and 3.8 percent in 2020 (fueled by the EXPO), the overall economy of this city is set to soar to new heights. The economic environment in the city will be conducive for company formation in Dubai, and new investors are expected to land here from all over the world.