S&P warns #Dubai economy to shrink 11%, cuts property giants to junk - Reuters

S&P warns Dubai economy to shrink 11%, cuts property giants to junk - Reuters:

S&P Global warned that Dubai’s economy was set to shrink 11% this year, as it cut the credit ratings of two of the emirate’s biggest property firms to ‘junk’ status.

Dubai, the Middle East’s trade and tourism hub, has been hit hard by coronavirus-containment measures and is set for an economic contraction almost four times worse than during the global financial crisis in 2009, S&P said.

“We now expect Dubai’s real GDP will shrink by about 11% in 2020, compounding the economic slowdown that began in 2015,” S&P analysts wrote in a note dated July 9, adding that the emirate’s fiscal deficit was expected to balloon to about 4% of GDP this year.

A growth rebound of about 5% is expected next year, but real GDP growth will then slow to 2% through to 2023, which would be half of what it has averaged for the last 10 years.