Dubai economy hit by COVID-19, contracts by 3.5 pct year-on-year in Q1

Aerial view of the Sheikh Zayed Road, following the outbreak of coronavirus disease (COVID-19), in Dubai, United Arab Emirates, March 26, 2020. (Reuters)

Dubai’s real gross domestic product (GDP) shrank by 3.5 percent year-on-year in the first quarter of 2020 amid the coronavirus pandemic.

Executive Director of Dubai Statistics Center (DSC), Arif al-Muhairi said: “It was expected that in the first quarter of 2020, the economy will experience a decline due to the global impact of the COVID-19 pandemic,” according to a statement issued by the Dubai Media Office (DMO).

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“The worldwide restrictions on movement for individuals through air, sea, and land entry points, as well as the unprecedented intensification of precautionary measures, which limited the flow of freight across borders, had significant repercussions on international trade and the global economy,” al-Muhairi added.

The report, however, highlighted that some sectors of Dubai’s economy “retained their growth momentum” in Q1, including real estate, finance and manufacturing. Real estate activity grew by 3.7 percent in Q1,

On the other hand, trade, and transport and storage activities contracted in Q1 2020 compared to the same time period last year. Trade declined by 7.5 percent and transport and storage activities declined by 5.5 percent.

Another sector which was hurt in Dubai, a travel and tourism hub in the Middle East, was the accommodation and food services sector (hotels and restaurants), which declined by 14.8 percent in Q1 from the same time period last year.

Al-Muhairi said: “Dubai’s health sector declined by 3.7 percent in Q1 2020 due to the need to allocate the majority of health resources to combating the COVID-19 pandemic, whereas the education sector recorded a growth of 1.1 percent during the same period as a result of the continuation of the educational process through online learning.”

Dubai reopens

Dubai has been gradually re-opening since the end of May, when Dubai Crown Prince Sheikh Hamdan bin Mohammed shortened curfew, eased some restrictions on activities and allowed the resumption of businesses, the emirate has been increasingly re-opening.

Since then, the emirate continued re-opening including allowing shopping malls and private sector businesses to operate at fully capacity, reopening of pools and resumption of water sports activities, and allowing 100 percent of public sector employees to return to work in their offices.

On June 18, Dubai allowed the resumption of a new set of activities and services including: public libraries, private museums and art galleries, home services such as those providing healthcare services to elderly people and people of determination, home beauty services, elective surgical procedures lasting more than two and a half hours, outdoor tourism and fitness activities such as camping; swimming pools; fitness centers, water sports, water parks, interactive water activities, 3D and 4D cinema halls, and children’s sports and play areas at public parks and beaches.

Dubai also started allowing foreign nationals with valid residency visas to return to the emirate from June 22 and said it will welcome back tourists from overseas starting from July 7.

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Last Update: Wednesday, 01 July 2020 KSA 06:35 - GMT 03:35
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