Despite recent speculations that the economy in Dubai is heading for a crisis, there have been some indications that state otherwise.
For many years, the mainstay of its economy has been real estate and tourism. With the current pandemic and travel bans all over the world, Dubai has recorded losses that threaten its economic stability.
Many economists and financial analysts had already foreseen a crisis similar to that of the 2009 crisis when it could pay off its debts.
Dubai is the most vulnerable of the economies in the Middle East and North Africa to the economic damage from such (lockdown) measures.
However, the good news is that business conditions in Dubai have bounced back to the highest since the coronavirus pandemic dragged the economy into a downturn.
The IHS Markit Dubai Purchasing Managers’ Index rose to 46 in May from a record low 41.7 in April. Thanks to a relaxation of lockdown measures, output, and new orders declined at a slower rate. Also, unemployment had the smallest drop in three months, according to a report.
The improvements are however not significant enough to declare a recovery. Recovery will be in view if there is a sustained improvement in the PMI and other growth indicators.
Sources: Bloomberg and Consumer News and Business Channel (CNBC).