February 8th 2020Business, dubai, UAE

UAE businesses optimistic about resilient economy

Next two weeks will bring in more clarity as to where the situation is heading globally

The global economy is certainly bearing the headwinds with China’s coronavirus outbreak, India is facing a slowdown, Brexit is here – just to name a few. Investors around the world are in for a surprise as they would have never factored in these setbacks on global scale. However, businesses in the UAE are very clear that this is a temporary phase and things shall rebound to normal, sooner or later.

Amid the backdrop of geopolitical tensions, trade wars, disruptions to oil supplies in the Middle East and a prolonged downturn in the manufacturing sector in 2019, the global economy continued to grow and did not suffer a recession.

Looking ahead to 2020, Invesco’s chief economist John Greenwood predicts another year of moderate expansion with low inflation for most developed economies.

“There is no denial the global situation has certainly made most businesses to adopt new strategies inorder to get over demand and supply hurdles. However, the UAE is known to be most resilient and diversified economy in the region known to adapt to global trends,” said Chirantan Joshi, national director – UAE, Corporate Connections.

“We have overcome situations in past and will continue to do so,” Joshi said on the sidelines of the launch of US-headquartered Corporate Connections – Dubai chapter.

Endorsing a similar view, Bijay Rajnikantt Shah, national director, BNI UAE, said the UAE entrepreneurs are advised to avoid any impulsive decision-making based on global trends.

“Next two weeks will bring in more clarity as to where the situation is heading globally. The UAE is right now in the midst of preparing to host Expo 2020 Dubai, which will change the face of Dubai on the world map,” he said, adding that the UAE has given Expo 2020 a spin that will bring in a global recognition across the world.

Bright prospects ahead

Rohit Walia, executive chairman of Alpen Capital, says the UAE has bright prospects ahead. “We are optimistic about UAE’s economy and expect to see a higher growth during 2020 due to massive infrastructure development and investment opportunities that are arising in the run up to Expo 2020. The Expo itself is expected to bring in international visitors that will boost tourism, hospitality and retail,” he says.

According to Invesco, despite geopolitical tensions and trade wars, investors continue to diversify portfolios geographically as they try to balance downside risk in certain markets with the potential to capitalise on opportunities in other markets.

“We have also noted diversification within and across asset classes as investors look to generate better risk-adjusted returns. Given the challenging market conditions, sovereign investors in the Middle East performed relatively well. It is also no surprise that they are looking at emerging markets for investment, particularly China – a greater number of investors from the region have access to that market than others globally. With these factors in mind, the overall sentiment is moderate despite the market headwinds,” said Zainab Kufaishi, head of Middle East and Africa and senior executive officer for Invesco.