Dubai, Indian economies on sound footing

Dubai economy is growing rapidly and sectors like trade, tourism, foreign direct investment are rising impressively both in value and volume. The economic outlook of 2013 for both Dubai and India has been outlined with optimism in presentations made by Sanjay Verma, Counsel General of India to Dubai and Thaddeus Malesa, Senior Executive, Dubai Chamber of Commerce and Industry. Economic growth continues for Dubai, so far India is concerned positive outlook is narrowed down by numerous pressing challenges. Assessment Verma and Malesa was sharing their assessment of the coming year for both the countries to the august gathering of the members of Indian Business Promotion Council (IBPC) which consists of renowned entrepreneurs, professionals, intellectuals and businessmen from the Indian community in Dubai. Malesa presented a much encouraging picture of Dubai’s economic outlook for 2013 while he described 2012 performance as strong with improved foundations. Last year trade solidified, tourism fully improved yielding better revenue, real estate sector recovered with prices increasing in certain pockets, local banks improved balance sheets, business sentiments improved and overall Dubai was seen as safe heaven for investors. “Dubai’s model of diversification has become a success as we see from the 2012 performances. With this background, to me, Dubai’s outlook for 2013 is bright” Malesa said. He said despite global trade slowing down, Dubai is destined to outperform based on higher commodity export. There are market signals towards import substitution with local industry and domestic manufacturing expanding. New sources of tourism,  large scale investments from local and international operators, higher activity through consumer confidence and new business growth along with more construction, all these will lead to a solid performance of the economy with smart growth in GDP. Bharat Butaney, President of IBPC mentioned that, “ India is likely to dominate in the world economic scenario during 2030 as per projections from US National Intelligence Council. Asia, mainly India is likely to return to a steady growth trajectory in the background of declining West and decelerating Chinese growth. However, there are challenges like rising interest rates, increasing cost in number of sectors and spiraling inflation. And of course one should not forget about the current account position of the country.” Indicators Kulwant Singh, Secretary General of IBPC said, “we are looking forward to the evening as the outlook for 2013 for both Dubai and India will be interesting to note especially when 2012 was one of the worst years in India while for Dubai the last year showed some records of decent recovery in the main economic indicators.” Verma said,there is no similarity between the economic background and outlook of the two countries -India and UAE.” He referred to a projected growth rate for India in the coming year at 6-7 per cent based on the estimation by number of renowned world bodies like International Monetary Fund (IMF), World Bank (WB), Moody’s. According to Verma, “ We will be lucky if growth touches 6 per cent this year given that 2012 was the most difficult year after 1991.” He highlighted young population, large market size, increasing per capita consumption in the rural areas and innovations are some of the positive factors in India. Also he is optimistic about the recent reforms like sale of PSUs, reduction in subsidy bill, withholding tax on foreign borrowing etc. But challenges are many like exchange rate risk, external shocks, inflationary pressure, and current account deficit and last but not the least, declining savings rate and lower gross domestic capital formation. From Gulf Today