UAE - Mubasher: Dubai's economy is forecast to shrink about 11% in 2020 due to the coronavirus (COVID-19) negative impact on the emirate's travel and tourism sectors, according to S&P Global Ratings.
The rating agency referred that Dubai's gross general government debt will be estimated at around 77% of GDP in 2020.
Although low oil prices have affected the GCC economies, including Dubai, hydrocarbons directly constitute only around 1% of Dubai's total GDP.
As for the indirect effect, weaker oil demand from Dubai's neighbours will impact the emirate's trade, tourism, and real estate markets.
The agency noted that Dubai's economy will recover to 2019 levels by 2023.
In 2020, the Dubai government expects to witness a central government deficit of AED 12 billion, accounting for 3.2% of GDP, driven by a decrease in the economic activities and the consequent expected 28% decline in revenues.
S&P Global Ratings expected that new government bond issuance and loans would reach 7% of GDP in 2020.
So far, the government has issued AED 8.4 billion public debt, representing 2.2 of GDP, marking the biggest year for Dubai's debt issuance since 2009.
To alleviate the impact of the current crisis on Dubai's economy, Abu Dhabi or the UAE federal authorities would financially support Dubai, S&P Global Ratings concluded.
