Dubai economy holding strong amidst Global slow down

Despite the global economy contracting for the first time since June 2000 in August (according to the latest JP Morgan composite purchasing managers index). Dubai rose to a new 3 year high due to growth in business activity. Both the travel and tourism, and wholesale and retail sectors showed an improvement.

The number of international visitors to Dubai exceeded 8 million in the year to July. A sharp improvement on last year as global travel restrictions have eased, but still around 15% below pre-pandemic levels. The sector is expected to perform extremely well through to the end of this year as travel eases further. with Australasia only recently re opening, and the Fifa World Cup taking place in Qatar in November.

This should add even further to the growth of the real estate sector. So far the number of transactions is up 60% year on year and value of transactions up more than 85% over the same period.

It will be interesting to see what happens throughout 2023, as higher interest rates may slow investment (especially for those needing a mortgage). Also the strong US dollar makes it relatively more expensive for investors due to the currency being pegged. On the positive side, this does mean that imports are less expensive for consumers and businesses, which helps keep inflation relatively contained.