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• Dubai can meet 18bn- dollar debt due next year

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  Dr. Nilgün Birgören    Premium Member   Group moderator

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  Dubai can meet 18bn- dollar debt due next year

  The combined debt maturities of Government of Dubai and the government-related entities (GREs) for next year is estimated at $18 billion (Dh66.20 billion) and the emirate has ample options to meet its obligations on time, said economists of Standard Chartered on Sunday.
  
  The total debt maturities of sovereign and quasi-sovereign entities of Dubai are estimated at $18 billion. With the most challenging of the debt issues restructured, the government and the GREs afre expected to manage the debt maturities through market funding sources.
  
  Standard Chartered economists said recent debt issues by the Dubai government and entities suggest that there is healthy demand for Dubai debt in the international market. Thus most of the maturities are likely to be met through capital market .
  
  The economists did not rule out debt restructuring of a few more GREs. However, they said with a combination of debt capital market fund raising and equity sales by a few of the successful government-owned businesses, Dubai can manage its debt obligations.
  
  Presenting its global economic outlook, Standard Chartered economists said Dubai's economy is expected to bounce back to grow 4 per cent next year. Dubai's economy is projected to grow between 1.5 to 2 per cent this year.
  
  The bank said that despite the slowdown in the real estate sector, the emirate's economy has been recovering on the back of growth in trade and hospitality.
  
  2010 saw a significant rebound in global trade; this, along with rapid growth in the retail and hospitality sectors drove Dubai's recovery despite the challenges of a suppressed housing market and debt overhang.
  
  The UAE economy is projected to grow 4 per cent next year and Abu Dhabi is expected to grow 5 per cent, the Standard Chartered outlook said.
  
  Economists say the UAE economy is poised for strong credit growth next year. UAE credit growth was weak throughout 2010. A key reason for this is that bank loans still exceed deposits.
  
  The gap narrowed from Dh47.1 billion in January 2010 to Dh25.5 billion in September, but this was the result of increased deposits and flat credit growth.
  
  Credit conditions should begin to improve moderately in 2011 on the back of the economic recovery and improving market sentiment following Dubai's planned debt restructuring.
  
  The UAE's private sector credit is projected to grow 9.4 per cent in 2011 against low single-digit credit growth in 2009 and 2010, Credit Suisse said last week.
  
  • 13 Dec 2010, 09:57 am
  Dr. Nilgün Birgören wrote: > The combined debt maturities of Government of Dubai and the > government-related entities (GREs) for next year is estimated at $18 > billion (Dh66.20 billion) and the emirate has ample options to meet > its obligations on time, said economists of Standard Chartered on > Sunday. > > The total debt maturities of sovereign and quasi-sovereign entities > of Dubai are estimated at $18 billion. With the most challenging of > the debt issues restructured, the government and the GREs afre > expected to manage the debt maturities through market funding sources. > > Standard Chartered economists said recent debt issues by the Dubai > government and entities suggest that there is healthy demand for > Dubai debt in the international market. Thus most of the maturities > are likely to be met through capital market . > > The economists did not rule out debt restructuring of a few more > GREs. However, they said with a combination of debt capital market > fund raising and equity sales by a few of the successful > government-owned businesses, Dubai can manage its debt obligations. > > Presenting its global economic outlook, Standard Chartered economists > said Dubai's economy is expected to bounce back to grow 4 per cent > next year. Dubai's economy is projected to grow between 1.5 to 2 per > cent this year. > > The bank said that despite the slowdown in the real estate sector, > the emirate's economy has been recovering on the back of growth in > trade and hospitality. > > 2010 saw a significant rebound in global trade; this, along with > rapid growth in the retail and hospitality sectors drove Dubai's > recovery despite the challenges of a suppressed housing market and > debt overhang. > > The UAE economy is projected to grow 4 per cent next year and Abu > Dhabi is expected to grow 5 per cent, the Standard Chartered outlook > said. > > Economists say the UAE economy is poised for strong credit growth > next year. UAE credit growth was weak throughout 2010. A key reason > for this is that bank loans still exceed deposits. > > The gap narrowed from Dh47.1 billion in January 2010 to Dh25.5 > billion in September, but this was the result of increased deposits > and flat credit growth. > > Credit conditions should begin to improve moderately in 2011 on the > back of the economic recovery and improving market sentiment > following Dubai's planned debt restructuring. > > The UAE's private sector credit is projected to grow 9.4 per cent in > 2011 against low single-digit credit growth in 2009 and 2010, Credit > Suisse said last week.