DUBAI, March 1 (Reuters) – Economic recovery in Dubai, the Middle East business hub, will be subdued and its gross domestic product in dollar terms will return to the 2019 level only in 2023, S&P Global Ratings said.
Dubai’s economy, heavily reliant on sectors such as transportation, tourism, and retail shopping, has been hit hard by the COVID-19 pandemic.
S&P has estimated Dubai saw the sharpest population decline in the Gulf last year, at 8.4% against a regional average of 4%.
“We think the 2020 shock will continue to reverberate through the economy, and GDP (in dollar terms) will return to the 2019 level only in 2023, keeping the pressure on most sectors until then,” S&P said in a report on Monday.
Real GDP contracted by 10.8% last year, the agency estimated. It expects the economy to recover this year, also partly thanks to Expo 2020, which Dubai delayed last year due to the pandemic and will now take place from October this year to March 2022.
The United Arab Emirates, of which Dubai is part, has the second-highest COVID-19 vaccination rate in the world, according to Oxford University’s Our World in Data research programme.
“High vaccination rates could help the UAE’s tourism sector recover earlier than others,” S&P said.
(Reporting by Davide Barbuscia; Editing by Stephen Coates)