With the gradual easing of Covid-19 epidemic prevention and control measures, Dubai's economic and social activities have recovered rapidly, and economic growth is expected to reach 4% in 2021. As a commercial and trade center in the Middle East, Dubai's economic fundamentals are relatively stable. The postponing of the World Expo to October this year will inject strong impetus into Dubai's economic recovery.


Affected by the epidemic, Dubai's tourism, aviation, retail, real estate and other industries suffered a "cold winter" in 2020, with an annual economic contraction of 6.2%. Among them, Dubai's hotel and restaurant industry suffered a 20 percent drop in global travel restrictions due to the outbreak, transportation and storage industry fell 11 percent, and retail and wholesale industry fell about 9 percent. The once booming real estate sector has also suffered. In the third quarter of 2020, residential property prices in Dubai fell 0.9 per cent year on year, rents fell 6.9 per cent year on year, and the market contracted 4.7 per cent for the year as a whole.

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To cope with the difficulties, the Dubai government has taken a number of measures to stimulate economic development, and from March to October 2020 has launched four times a total of 6.8 billion dirhams (about $1.86 billion) of economic stimulus plan. The economic stimulus package covers consumption, investment, trade, tourism and other areas, and provides support to enterprises in employment, supply chain, and operating costs. Sami Alkamzi, director general of the Dubai Bureau of Economic Affairs, said the government's economic stimulus measures were aimed at ensuring that the short-term impact of the Covid-19 outbreak on the economy did not translate into long-term difficulties.


Recently, the government of Dubai announced its fiscal budget for 2021, with the fundamental purpose of accelerating the pace of economic recovery, enhancing social benefits and improving infrastructure. Of the total budget expenditure of 57.1 billion dirhams ($15.6 billion), 41 percent is for infrastructure, 31 percent for health, education, housing and other social services, 22 percent for security, justice, and 6 percent for scientific and technological innovation. The budget sends a clear message that Dubai will pursue an expansionary fiscal policy that will boost global market confidence in Dubai's economic development, attract more direct investment, support sustainable growth and accelerate its transition to a knowledge-based economy. In a bid to improve its business environment and attract foreign investment, Dubai not only lifted the requirements for a 10-year "golden visa" in 2020, but also launched a customised "residency programme" for professionals who live in the emIRate and work remotely for overseas companies. The market's confidence in Dubai's economic development will be further enhanced as the vaccination of the new crown vaccine progresses in Dubai.


The UAE economy, the second largest in the Arab world, is expected to grow 2.5 per cent this year, with the non-oil sector expected to grow 3.6 per cent, according to the latest figures released by the central bank. Increased government spending, a rebound in credit and employment, a stabilization of the real estate market, a return of market confidence and the hosting of the Dubai Expo will be the main drivers of the rapid growth of the UAE's non-oil economy.

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