Dubai Business Sector Sentiment During the Covid 19 Crisis
The COVID 19 pandemic has disrupted the global economy like no other. Global business and trade were impacted severely and several big cities are still recovering from it. The Dubai business sector like any other was also affected, although effective economic strategies and preventive measures have helped the economy to recover sooner than expected. Dubai’s commercial sector saw a remarkable comeback with investments pouring in from all corners of the world as the city is now considered as one of the safest cities in the world to start a new business. Dubai’s resilient business sector has regained its foothold after the COVID 19 crisis and is expected to grow stronger than ever in years to come.
The arrival of a global pandemic like COVID 19 impacted almost all sectors in Dubai, both private and public. Preventive measures like strict lockdown rules, closing of country borders, and suspension of international flights affected the economy harshly as almost 80% of the UAE professional sector comprises expatriates from all over the world. In addition, the tourism and hospitality industry – one of the strongest professional sectors in Dubai saw a sudden dip in revenue and had to seek new methods for its survival. For instance, according to the reports by CNBC, almost 70% of travel and tourism companies were on the verge of dissolution. Likewise, the Beauty and Cosmetic industry was also affected adversely, with hairdressing centers and spas facing the worst. Similar crisis swept across other fields like international trade and transport, causing the UAE’s GDP to fall 5% lower according to the data collected by IMF in 2020. However, sectors like e-commerce and healthcare saw significant growth due to obvious reasons. Certain other business sectors like supermarkets and restaurants were also able to survive, barely it is, by depending on delivery apps and agencies. Digitalization of almost all professional sectors resulted in the growth of ICT industries, one of the fastest-growing sectors of Dubai in current condition.
Nevertheless, the effective and timely intervention of Dubai authorities helped many business sectors to stand back on their feet and survive. Dubai Government launched an AED 1.5 billion Economic Stimulus Package at the very beginning of the crisis supporting big and small companies in the city with various provisions to reduce the fee of business and cost of production. The package was extended to AED 7.1 billion in 2021 so as to continue the support the business sectors in Dubai require. In addition to these, the provisions included measures to lower building rents, water and electricity bills, customs and trade fees, and even various administrative penalties. Several banks and other financial institutions in Dubai also contributed to the relief packages by introducing loan reduction schemes and reducing transaction charges. All these activities, along with the rigid COVID 19 protocols enabled Dubai to recover swiftly than anticipated. At present, with EXPO 2020 on the horizon and other global activities on the line, the GDP is expected to rise 3% higher according to the IMF data.
Dubai’s business sectors are strong and were able to survive even the harsh conditions of a global pandemic. Dubai’s economy is getting back on its feet, anticipating a growth like non-other. This has resulted in Dubai becoming one of the safest cities to start a business amidst the COVID 19 crisis. For the past 17 years, Flying Colour Business Setup has been helping clients set up their businesses in an easy and hassle-free manner. Please feel free to mail your queries at info@flyingcolour.com or contact us at +971 4 4542366.
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