June 30, 2020 / 5:26 PM / 3 days ago

Dubai's economy shrank by 3.5% in first quarter amid coronavirus crisis

DUBAI (Reuters) - Dubai’s real gross domestic product shrank by 3.5% year-on-year in the first quarter, the government’s media office said in a statement on Tuesday, as the Middle East’s business and tourism hub feels the impact of the coronavirus crisis.

A man walks at the Dubai International Financial Centre, almost empty of people, following the outbreak of coronavirus disease (COVID-19), in Dubai, United Arab Emirates, March 18, 2020. REUTERS/Satish Kumar/Files

Citing data from the emirate’s statistics centre, the government said some sectors such as real estate and finance had however kept momentum despite the pandemic.

“Dubai’s economy witnessed healthy levels of growth in 2019. It was expected that in the first quarter of 2020, the economy will experience a decline due to the global impact of the COVID-19 pandemic,” said Arif Al Muhairi, executive director of Dubai Statistics Center.

In 2019 Dubai’s GDP reached 407.2 billion dirhams ($110.87 billion), a rise of 2.2% year on year, the statement said.

Trade, transport and storage activities shrank in the first quarter, with trading activity - the largest contributor to the emirate’s economy - down by 7.5% year on year.

The accommodation and food services sector - hotels and restaurants - declined by 14.8% in Q1 year on year, said the statement, while in the whole of 2019 it had posted 3.6% growth, accounting for 5.1% of Dubai’s economy.

Dubai has said it will allow foreign visitors to enter from July 7, after months of strict measures to curb the spread of the new coronavirus.

The Dubai property sector, which has been sluggish for years, grew 3.7% in Q1, while finance and insurance activities posted a slight growth of 0.3%, the government said.

Real estate activity contributed 8% to the overall economy in Q1.

($1 = 3.6728 UAE dirham)

Reporting by Davide Barbuscia; Editing by Kevin Liffey

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