#Dubai faces 5.5% recession this year as $10 bln debt repayments loom, BofA says - Reuters

Dubai faces 5.5% recession this year as $10 bln debt repayments loom, BofA says - Reuters:

Dubai could see a recession of around 5.5% in 2020 as it faces about $10 billion in debt maturities this year while revenues are expected to drop in line with the pattern of the 2009 crisis, Bank of America said in a research note.

Measures to stem the spread of the coronavirus have dealt a blow to Dubai’s economy, bringing vital industries like tourism and aviation to a near halt.

Bank of America estimates that Dubai’s fiscal deficit could widen to $4.4 billion, or 3.9% of GDP, and could be as high as 5.3% if interest payments on a loan from Emirates NBD, Dubai’s biggest lender, are included.

Financing of the fiscal deficit or liquidity injection into government-related entities (GREs) will likely primarily be via loans from ENBD, Bank of America said. Dubai could also draw on $1.4 billion in deposits at ENBD or issue privately placed bonds.