Dubai’s economic indicators point to a strong recovery

High net worth investors and analysts are betting on a strong recovery in Dubai’s economy for 2021, led by strategic sectors such as retail, hospitality, tourism, transport and logistics, and following the arrival of Covid-19 vaccine, as well as due to the reforms announced during the pandemic.

The latest set of data for Dubai’s consumer confidence shows it is the highest in six years. The first quarter of 2021 saw consumer confidence in Dubai rising to its highest level since the second quarter of 2015.

The index recorded 145 points in Q1 2021, compared to 139 points during the same period of the previous year, and 142 points in Q4 2020.

The overall optimism in among the Dubai residents is driven by the improved outlook for the personal finance conditions during the next 12 months. The index showed that optimism on current personal finance conditions is particularly high among Emiratis at 89 per cent, followed by Arab expatriates at 87 per cent.

Dubai’s Purchasing Managers’ Index for February was 50.9, up from 50.6 in January. A PMI reading above 50 means economic activity is positive and the private sector business activity continued to extend gain in for a third straight month with positive job creation.

Nearly 90 per cent of Dubai’s population expects improved chance of getting a job during the next 12 months.

While the overall economic activity in the UAE is on the recovery path, the GDP growth is forecast to pick up to 2.5 per cent and 3.5 per cent, respectively in 2021 and 2022, compared to an estimated 5.8 per cent contraction last year, according to the Central Bank of UAE (CBUAE).

Meanwhile, Dubai Statistics Centre estimated that the emirate’s economy will expand four per cent next year on the back of effective policy measures taken by the emirate’s government that will drive increased investment inflows and job creation in the coming years.