Leisure industry helps growth of Dubai economy
November 6, 2013 | 12:00 AM
Dubai’s economy is rebounding four years after the second-biggest emirate teetered on the brink of default. The hotels and restaurants industry grew 14 per cent, while manufacturing expanded 13 per cent. – Bloomberg News

Dubai: Dubai's economy is headed for the fastest expansion in six years as the Middle East's financial and transport hub benefits from an increase in hotel occupancy and manufacturing.

Gross domestic product expanded 4.9 per cent to Dh169 billion ($46 billion), compared to 4 per cent in the first half of 2012, the statistics office said yesterday. The economy expanded 4.4 per cent in 2012, the most since 2007.

The hotels and restaurants industry grew 14 per cent in the first half this year, while manufacturing expanded 13 per cent, as the second-biggest emirate in the United Arab Emirates continues to recover after almost defaulting on debt in 2009.

The benchmark DFM General Index surged 79 per cent this year, making it the best performer among the 50 biggest equity markets globally.

"Dubai is seeing an acceleration in a number of sectors, benefiting from increased investment and exports, including tourism," Monica Malik, Dubai-based chief economist at investment bank EFG-Hermes, said in e-mailed comments. "We continue to see a strong outlook for the second half of 2013."

Hotels busier
Hotel occupants rose 11.1 per cent in the first half to 5.6 million people, the statistics office said. The number of hotel rooms increased by 4,729 to almost 59,000. Wholesale, retail and maintenance services expanded 4.1 per cent and contributed 29 per cent to the emirate's economy.

Business services and real estate, at the heart of Dubai's debt crisis, grew 3.3 per cent. Electricity, gas and water expanded 4.3 per cent.

Companies such as Emaar Properties, builder of the world's tallest skyscraper in Dubai, are benefiting from the recovery. The developer, which also owns hotels and shopping malls, reported a 50 percent jump in third-quarter profit to Dh581 million.

Lacking the oil wealth of neighboring Abu Dhabi, Dubai has relied on trade, tourism and financial services for growth. It owns Emirates Airlines, the world's biggest carrier by international traffic, and its tax-free financial center is home to regional offices of banks including Goldman Sachs.

"The strengthening in Dubai's growth is reflected in our" estimate for the UAE's 4.6 per cent non-oil expansion this year, Malik said.

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