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Dubai’s financial centre grew by 14 per cent in 2016, bucking the trend of the emirate’s slowdown amid the regional oil price slump.
Active registered firms at the Dubai International Financial Centre, the region’s leading hub for financial firms, rose to 1,648 from 1,445 in 2015, helping the government-owned free zone’s profit rise 7 per cent to Dh421m ($115m) in 2016.
The number of financial firms in the DIFC grew by 10 per cent, while non-financial companies grew by 17 per cent and retail outlets expanded by 12 per cent.
The workforce in the centre, which is located in Dubai’s central business district, grew 9 per cent to 21,611. The DIFC aims to treble in size between 2014 and 2024, when it hopes to house 50,000 workers and 1,000 financial firms.
“If we continue to achieve these growth rates, we will exceed our targets for 2024,” Essa Kazim, governor of the DIFC, told reporters.
He said Dubai’s position as a services hub could benefit from global trends such as the movement of financial firms because of Brexit, potential deregulation under President Donald Trump and economic reform in Saudi Arabia.
The growth at DIFC, which he said is backed up by a strong pipeline for 2017, contrasts with other sectors in the trade, tourism and transportation oriented economy.
Dubai’s GDP growth slumped to 2.7 per cent in 2016 from 4.1 per cent in 2015, its slowest rate of growth since the emirate’s steep recession in 2009.
Lacklustre global trade and travel, the strong dollar’s impact on the tourism and retail sectors, real estate weakness and the regional impact of low oil prices have combined to hit the emirate’s broader economic health.
The slowdown has sparked a series of redundancies across many sectors after the hiring boom between 2011 and 2015.
The DIFC says it is attracting more financial firms from Asia and the Middle East as it seeks to facilitate a “south-south corridor.” Last year, 60 per cent of the growth came from emerging and Asian markets.
New entrants include the Bank of Singapore, the Bank of Palestine and HDFC Life of India.
“Our focus will be on China and India, the two major blocks that support the south-south corridor,” said Mr Kazim. “They are showing interest.”