Dubai's economy is forecasted to remain in a recession for 2010. This will be the second year in a row that Dubai will experience a negative growth. A 'UAE Vision 2010' report stated that Dubai's economy would contract by 0.4% this year, following a 5% contraction last year. This will be mainly due to the declines in residential sale prices fallen by 61%, and Dubai's population fallen by 10%. The real estate market is expected to drop another 10%, which will result in a continued decline in population.
A resolution of Dubai's world debt will be the main catalyst for economic growth within the country. Dubai's government is trying to look at the broader picture when doing negotiations and trying to look at the effect it will have on their economic growth. Dubai is also trying to strengthen their reputation with International Capital Markets and local banks.
It comes as no suprise to me that Dubai's economic outlook is poor. The real estate market is vital to its survival. When this industry recovers, Dubai will follow.
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