S&P Global Ratings expects Dubai’s real GDP to expand this year by about 3%, while local and UAE-wide structural and social reforms and programs should support longer-term growth.
Dubai’s government debt burden will decline as a share of GDP amid robust economic growth, the study observed.
“We forecast a reduction in government debt to about 51% of GDP in 2023 from a cyclical high of 78% in 2020,” the report said.
According to the paper, the government’s debt stock could fall even faster if the reduction in nominal debt, which occurred in 2021 and to a more significant extent in 2022, continues over the coming years.
Nevertheless, broader public sector debt will remain high at about 100% of GDP, when considering liabilities from non-financial government-related entities (GREs) of about 48% of GDP.
Read more: Dubai’s economy holding up well amid global slowdown
Growth prospects
Additionally, the agency expected Dubai’s relatively well-diversified and service-oriented economy to expand by about 3.0% in 2023, slowing from an estimated 5.0% in 2022 and 6.2% in 2021.
“In our view, this year will be more reflective of regular economic activity in the emirate compared with the post-pandemic recovery years. We expect continued strong momentum in the hospitality, real estate, trade, and financial services sectors to support growth,” Standard & Poor’s noted.
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