Dubai's Economic Hopes Flying High at Cost of Huge Discounting
Economic Hopes Flying High in Dubai at Cost of Huge Discounting
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Dubai’s latest growth spurt is coming with a sharp discount.
Business conditions in the emirate’s non-oil private sector improved at the fastest rate in over four years in April as companies led by wholesalers and retailers offered lower prices to win orders, the seasonally adjusted Emirates NBD Dubai Economy Tracker Index showed on Thursday.
The gauge rose to 57.9 from 57.6 in March, edging further above the threshold of 50 that separates contraction from growth. The 12-month outlook for activity climbed to the strongest since the data series began in 2010.
“This growth in the volume of activity appears to be underpinned by price discounting, rather than an improvement in underlying demand,” said Khatija Haque, head of Middle East and North Africa research at Dubai’s biggest bank. “As a result, firms are reluctant to boost hiring and consumers are likely to remain cautious.”
The reliance on price discounts and promotions highlights the fragility of Dubai’s economy after notching its weakest expansion in almost a decade in 2018. Growth is set to accelerate this year and next before slowing in 2021, according to projections released last month by the city’s department of economic development.
Other highlights from the report:
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To contact the reporter on this story: Zainab Fattah in Dubai at zfattah@bloomberg.net
To contact the editors responsible for this story: Lin Noueihed at lnoueihed@bloomberg.net, Paul Abelsky, Mark Williams
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