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Bigger 2009 Dubai budget |
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12/26/2008 10:28:30 AM |
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The Dubai Government is working on a bigger budget for 2009 than the previous one, which will demonstrate the strength of the economy during the global financial crisis, according to a top official of the emirate.
"The budget will be announced very soon. It will show to all the strength and resilience of Dubai's economy and prove all the rumours floating around about the emirate's precarious finances wrong," Nasser bin Hassan Al Shaikh, Director-General of the Dubai Department of Finance, told Emirates Business on the sidelines of a forum organised by the Abu Dhabi Chamber of Commerce and Industry. The forum discussed the impact of the crisis on the country's contracting sector.
"Denying reports that Dubai sold off some of its assets to Abu Dhabi or other emirates, Al Shaikh said: "This is totally untrue. If you go by reports in the Western media, all of Dubai has been sold, starting from the Metro. We have a very big problem today with some foreign reports, which do not in the least reflect the prevalent economic situation in Dubai."
When asked to predict Dubai's growth rate in 2009, he said: "According to the Dubai Government strategic plan, the growth rate should be 11 per cent. But I expect it to be between four and six per cent due to the consequences of the international financial crisis. This is much better than the developed countries in which the growth rate might be zero."
Al Shaikh also rubbished all allegations that some contractors executing projects for the Dubai Government and government-owned entities were yet to receive payments that were long overdue. "I can confirm there are no complaints of this nature. There are no pending payments for Dubai-based contracting companies. If there were any, we would have discussed them in the Consultative Council set up by Dubai to follow-up the effects of the global financial crisis on the emirate," he said.
Speaking about Dubai's external debts, Al Shaikh said: "The government and government-owned companies are re-paying external debts of Dh80 billion. There are no pending installments at all. The debts are being serviced in a timely and excellent manner and there is total satisfaction regarding repayment of debts on time."
Emphasising the robustness of the emirate's real estate sector, Al Shaikh said: "The real estate sector in Dubai is strong and firm. Projects under construction will not stop. There might be a delay in the announcement of some new projects where construction has not started and this is natural given the state of the market.
"The real estate market here is very different compared to the United States, and the effect of foreign players on Dubai's real estate market is still limited. Foreigners entered the market a few years ago but they do not form the big force in the market that they are made out to be.
"We have heard all about Dubai's real estate sector going into recession, with statements by many non-official bodies claiming 70,000 residential units would be offered in 2008. However, after we set up a committee to study the realities of the situation in co-operation with top property developers, we found that figure to be around 34,000. It might even fall to 28,000 due to operational delays at some contractors. In 2009, the number of new units will not exceed 32,000.
"We also found out that some developers decided not to begin construction on their projects because not all units had found buyers. Consequently, the number of units offered in 2008, 2009 and 2010 will be much less than expected."
While admitting banks would offer less credit in 2009, Al Shaikh expected the banking sector to begin its recovery next year.
"Loans in the real estate sector grew sharply in 2008 and reached Dh200bn. In 2009, the figure is expected to be Dh100bn. The banking sector will start to recover in the first quarter of 2009 and we are in constant touch with the Central Bank in this regard." |
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Source:Zawya.com |
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