Dubai's non-oil economic growth picked up in the second quarter of 2019, reaching nearly four-year high, which would result in the emirate's economy growing faster this year as compared to 2017-18.
Khatija Haque, head of Mena Research at Emirates NBD, said there was little change in Dubai Economy Tracker (DET) Index for the month of June survey relative to May, but the data for second quarter of 2019 points to a sharp acceleration in Dubai's economy, with the average DET index reading at the highest level since first quarter of 2015.
"However, this growth in the volume of output has been on the back of continued price discounting and as a result is not translating into more jobs or higher salaries in the private sector. Nevertheless, the survey data so far this year supports our view that Dubai's GDP growth is likely to be faster in 2019 compared with 2017 and 2018," Haque said in a statement.
Earlier, Emirates NBD Research had said in a note that Dubai's GDP will grow three per cent in 2019, rising to 3.7 per cent in 2020, underpinned by construction and real estate and business services, hotels and restaurants and transport and logistics.
Monica Malik, chief economist at Abu Dhabi Commercial Bank, predicted that the economy will strengthen this year and the next as compared to last year, mainly due to stronger investment activity and increased tourist inflow.
Manjeet Singh Chhabra, managing director of credit rating agency CRIF UAE, had said that there was strong government spending, and improved credit growth. The oil prices have climbed up in the last few days due to geopolitical risks that will drive economy and spending related to Expo 2020.
According to Emirates NBD Research, the seasonally adjusted DET Index was little-changed from May's 52-month high of 58.5 to 58.4 in June. The elevated level of the headline figure reflected further marked increases in total activity and new business, in contrast to a neutral contribution from employment.
Emirates NB Research said rising output failed to generate higher employment, with staffing broadly unchanged since May. This continued the weak overall trend in the labour market seen over the past year-and-a-half.
It said the strongest overall performance was again registered in wholesale and retail (59.9), although growth slowed for the first time in 2019. The headline figure for tourism and recreation also eased since May (58.9), but to a smaller degree. In contrast, construction posted its best overall performance since last November (57.0).
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