Dubai’s Economic Growth Rate Soars

by Lorys Charalambous, Tax-News.com, Cyprus

04 April 2005

According to recently released statistics, the economies of the United Arab Emirates, and its main financial centre, Dubai, have been growing at breakneck speed in recent years as a result of foreign investment and high oil prices.

Government figures have revealed that the gross domestic product of the UAE as a whole grew by 15% to 337 billion dirhams (US$91.7 billion) in 2004, whilst the economy of Dubai grew at an even faster pace as its GDP expanded by 16.7% to a little under 100 billion dirhams.

As the government has put into place a series of investor-friendly tax and regulatory polices in a variety of industries, Dubai’s economy has grown by an average of 10% per year since 1995 – the fastest growth rate in the world, according to Mohammed Alabbar of Dubai’s Department of Economic Development.

However, analysts believe that rising oil prices, currently over $50 a barrel, are also responsible for growing wealth in the Gulf states.

“We see no reason for oil prices to come down before late 2006, and there will be pretty high GDP figures over the years to come,” predicted David Butter, and Economist Intelligence Unit analyst, according to AFP.

However, he added that the UAE must follow through on its pledge to allow foreign real estate ownership across all of the Emirates, not just Dubai, as is currently the case.

Failure to do so “will hit confidence” in the UAE, Butter observed.

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