Expo 2020 Dubai, a global trade exhibition, is expected to add 122.6 billion dirhams ($33.4 billion) to the United Arab Emirates’ economy between 2013 and 2031, according to an economic study conducted by consultancy EY.
The event could help Dubai’s sluggish economy, which grew 1.94 percent in 2018, the weakest pace since a 2009 property crash that triggered a debt crisis.
The study, which was commissioned by the Dubai government in late 2017, and its findings published on Monday, projected that the effect of Expo 2020 from October 2020 to April 2021 would be equivalent to 1.5 percent of UAE annual gross domestic product.
“Expo 2020 is expected to attract 25 million visits and 190 country participants”, the report said. EY estimated the event will support an average of 49,700 jobs a year.
After the event, from May 2021 to December 2031, should contribute 62.2 billion dirhams ($16.94 billion) to GDP and support an average of 53,800 jobs per year, the study said.
However, analysts question whether Expo 2020 will provide sustainable economic growth, especially considering the current slowdown.
“Our bigger concern about the Expo is whether the long-run benefits materialize in full. These hinge on further companies moving to the Dubai 2020 site,” said William Jackson, senior emerging markets economist at London’s Capital Economics.
“If this doesn’t materialize, Dubai could be left with over-capacity ... This is something that may be particularly notable in the hotels sector, where projected visitor arrivals seem very high. Over-capacity would make it harder to firms to repay debts incurred to fund the construction of the Expo site.”
Dubai’s stock index fell more than a quarter of its value in 2018, the worst performance in the Middle East last year amid a renewed downturn in property prices.
S&P Global Ratings said in February last year that after falling 5 to 10 percent in 2017, real estate prices could decline by 10 to 15 percent in Dubai over the next two years.