Dubai core business in 'excellent shape'
Dubai, June 21, 2011
Key sectors of Dubai's economy grew in the first half of the year and are in excellent shape, top officials said on Tuesday.
One of the seven United Arab Emirates, the trade and business hub is recovering from last year's $25 billion debt restructuring in its flagship company, Dubai World, after its 2009 default that sent global markets reeling.
"I can really say the core business of Dubai is in very good shape," Sheikh Ahmed bin Saeed Al-Maktoum, chairman of Dubai's Supreme Fiscal Committee, told a news conference.
He declined to say whether the emirate planned to inject more money into the Dubai Financial Support Fund, which was set up to support state-linked firms.
Dubai, which lacks the oil wealth of neighbouring Abu Dhabi, said in its updated government debt issuance programme earlier this month that $1.55 billion was left in the support fund.
The emirate, which is facing around $30 billion in debt repayments over the next two years, said in May it could extend loans to more firms.
Sheikh Ahmed is also chairman of airline Emirates and debt-laden conglomerate Dubai World , and an uncle of Dubai's ruler.
Dubai, whose debt pile is estimated at $113 billion or 138 percent of its economic output, has been recovering this year helped by a pickup in trade flows and as investors flocked in amid social unrest in neighbouring countries.
"All the economic indicators are good," Ahmed Humaid Al-Tayer, another Supreme Fiscal Committee member and Chairman of Dubai International Financial Centre, told reporters.
"The sectors of trade, tourism, air transport, services, all have seen growth in 2009, 2010 and the first half of this year," he said.
Dubai's trade and property-focused economy expanded by 2.4 percent in 2010, when it was hit by Dubai World's restructuring, after the same contraction in the previous year.
Despite recovery, banks still remain hesitant to lend across the UAE, the world's No. 3 oil exporter, and the once-booming property sector is still weak in Dubai, known for ambitious projects such as the world's tallest tower.
"The real estate, of course, I mean there is no quick solution. It will take time," Tayer said. - Reuters