Due to its success in paying off some of its loans during a robust economic recovery, Dubai has been able to lower its public debt by AED29 billion (USD 7.8 billion).
According to the Public Debt Management Office of the Department of Finance, the reduction reduces the emirate’s debt burden as a percentage of its GDP to 25%, the Dubai Media Office stated on social media.
All debt classes in the government’s debt portfolio see a fall, including Sukuk certificates worth AED3.3 billion that were fully redeemed.
It also comprises a partial settlement of AED20 billion from the finance provided by the Abu Dhabi government and the UAE Central Bank as well as the return of bilateral and syndicated loans totalling AED5.2 billion.
Cyclical High
In 2020, the public debt amounted to 78% of GDP, which is a cyclical high.
A drop in the emirate’s government debt to around 51% (USD 66 billion) of the economy this year was predicted by ratings agency S&P in May 2023, citing economic growth.
After the COVID-19 pandemic, Dubai outperformed other economies as it became a popular travel destination for tourists, high-net-worth individuals, and investors.
According to S&P, Dubai has been repaying debt between 2020 and the first quarter of 2023, including USD 2.9 billion in bonds. Over the same time period, the emirate also cut its debts from Emirates NBD by a third.
Fitch Solutions predicted earlier this year that Dubai’s real GDP growth could slow from an anticipated 4.2% in 2022 to 3.8% in 2023.
Due to the high cost of living, high and growing borrowing costs, and diminishing base effects, economic growth will slow down.
Dubai has successfully lowered its public debt by AED29 billion (USD 7.8 billion) due to its success in paying off some of its loans during a robust economic recovery.
This reduction decreases the emirate’s debt burden as a percentage of its gross domestic product (GDP) to 25%. All debt classes in the government’s debt portfolio see a fall, including Sukuk certificates worth AED3.3 billion that were fully redeemed.
Dubai has been repaying debt between 2020 and the first quarter of 2023, including USD 2.9 billion in bonds. The emirate’s government debt is predicted to drop to around 51% (USD 66 billion) of the economy this year, citing economic growth.