Dubai concerns start to mount

The past month has brought more bad news on Dubai’s economy. Markit’s Dubai PMI hit a four-year low in January and efforts to contain the coronavirus pose a threat to the Emirate’s transport and tourism sectors. And the real estate sector remains in the doldrums. The World Expo should provide a lift to the economy when it rolls into town later this year. But the boost will be temporary and potential overcapacity in the real estate and tourism sectors after the event is likely to weigh on the revenues of government-related entities, which were at the heart of the 2009 debt crisis. This month’s deal that saw DP World delisted from the stock exchange, which was partly an effort to secure funds for its parent’s debt repayments, may be a sign that debt servicing is already becoming a pressing issue.