Dubai Economic Growth and Services Sector

Dubai’s services sector is vital to its economic growth as the city is improving and updating its systems by using digital technology. According to Oxford Business Group (OBG) report, Dubai’s intention to increase its tourism is clear, as 2020 Expo is in the horizon, offering countless investment opportunities for investors interested in the hospitality sector and other intertwined infrastructure and sectors. 

While the city’s efforts to recover from the devastating 2009 financial crash are paying off, Dubai’s role as a regional hub is further attracting investors thus increasing capital flow.

Factors that will contribute to Dubai’s Future:

1. Dubai has upgraded

The MSCI upgraded the UAE from frontier to emerging market in 2014, which has led to increased liquidity. At the same time, it is anticipated that an improved trading platform will lead to a greater interest amongst companies that are considering registering. Financial experts believe that the upgrade will aid the UAE attract companies outside the UAE borders. Finally, in 2014, Dubai also raised an equity capital, marking the city’s first offering over a period of five years.

2. Public Offerings

Dubai has planned numerous projects for the upcoming 2020 EXPO including the launching of an Initial Public Offering (IPO ) pipeline. Reevaluated rules and regulations involving listing and resilient prices of the stock market will also contribute as to when precisely the IPO pipeline will be launched. On a bright note, the fact that Dubai’s government has set as priority to strengthen the city in order to become a stronger regional financial centre as well as vigorously progressing with infrastructure plans are both promising factors that will attract investors in purchasing sukuks (Islamic bonds) and equities.

3. Real Estate

Dubai’s construction sector has increased overall contributing 8% to the city’s GDP in 2013, which is a rate well below the 14% increase marked in 2008, which led to the financial crash. Construction loans marked an increase of 40% at the end of 2013, reflecting construction companies’ restored confidence in the real estate market. Statistics revealed that the 40% loan increase was the highest increase since mid-2009.

4. Public-Private Partnership Collaboration

Dubai’s construction market is anticipated to benefit immediately by the emirate’s plans to implement a public-private partnership (PPP) model, which is further encouraged by the government’s vision and plan for getting all its projects on the internet. By presenting PPPs, Dubai intends to attract funding for new and huge business ventures, particularly for residential as well as public ventures. The legislation framework is presently being revised and drafted. If the PPP model is accepted and introduced, it will be the second model in force throughout the Gulf region.

5. Green Economy

Dubai has marked energy saving as its top priority. Dubai Integrated Energy Strategy (DIES) strives to decrease its energy consumption by 30% until 2030, as it intends to make smart use of water and electricity. Additionally, the newly founded Dubai Energy Agency (DEA) aims to increase efficient use of energy by advising consumers, industries as well as the government.