Dubai economy grew 2.3pct in H1 of 2010

Dubai's economy grew 2.3 per cent in the first six months of 2010 as trade and manufacturing improved along with tourism, the Dubai Statistics Center said, confirming earlier remarks by its chief.

The global crisis ended an oil and real estate-led boom in the United Arab Emirates last year, sending the world's No 3 oil exporter into its first downturn since 1993. Dubai's debt woes have weighed on the economic recovery in 2010.

"The sectors of manufacturing, transport, logistics, services, wholesale and retail trade, hotels, restaurants and government services achieved positive growth," Arif Obaid al-Muhairi was quoted as saying on a news website.

He did not say whether the gross domestic product increase was in real or nominal terms.

The property sector contributed 11 per cent to the Gulf emirate's economy in the first six months, Muhairi said, down from 14 per cent for whole of 2009, and 17 per cent in 2008.

Dubai's non-oil exports and re-exports soared by 46 per cent and 26 per cent, respectively, in the second quarter, while imports jumped 17 per cent, data has showed.

Muhairi predicted last month Dubai's GDP growth at 2.3 per cent for 2010, well above a 0.5 per cent forecast by the International Monetary Fund.

In February, when uncertainties around indebted state firm Dubai World weighed on the market, the IMF said it saw Dubai's GDP contracting 1.3 per cent in 2010.

The economy of the emirate, which accounts for some 80 per cent of the UAE non-oil trade, expanded 5.7 per cent in real terms in 2008. Official 2009 GDP data for Dubai are not available, although the IMF estimates a 0.9 per cent contraction.

Concerns about Dubai's liabilities, estimated at around $115 billion, have eased after Dubai World reached a deal in September to restructure almost $25bn of debt.

But worries still persist about the debt pile owed by key firms such as Dubai Holding . Dubai and its firms face some $30bn worth of debt maturing in 2011-2012.

Overall UAE credit growth remains anaemic due to bank exposure to Dubai debt, and is the main reason that leaves the Opec country's economy trailing its Gulf oil-exporting peers.