Dubai announces $408.4m stimulus package to combat coronavirus slowdown

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Latest amount brings total support provided by the government to $1.7bn throughout Covid-19 crisis

Dubai has announced a AED1.5 billion ($408.4m) stimulus package to support the emirate’s economy during the ongoing financial crisis caused by the Covid-19 global pandemic.

The package was announced by Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and brings the total support provided by the government to AED6.3bn ($1.7bn) since the onset of coronavirus.

Sheikh Hamdan said: “We aim to enhance the liquidity of companies and support the continuity of their business and reduce the cost of doing business and facilitate procedures.”

Measures include relief for the hospitality sector in the emirate, with municipality fees cut in half at 3.5 percent for the rest of the year. The tourism dirham fee will also be halved through to December.

In the announcement, made through Twitter, Sheikh Hamdan said: “We also directed the expeditious payment of financial dues to contractors, as well as the return of all financial guarantees for construction and construction activities related to the commercial licenses deposited with them … to be replaced by another system that guarantees all the rights of the contracting parties.”

It was also revealed that private schools will have their teaching and business licenses waived until the end of December.

Sheikh Hamdan said: “We trust in the flexibility and durability of our economy. We stand together with the private sector to move beyond this stage very quickly. We are keen to return business to normal as soon as possible and we confirm our commitment to support all economic sectors.”

 

Dubai’s initial stimulus package, launched in March for a period of three months, included a freeze on the 2.5 percent market fees levied on all facilities operating in Dubai. The fees were reduced from 5 percent in June 2018.

It also extended a refund of 20 percent on the custom fees imposed on imported products sold locally in Dubai markets, as well as the cancellation of the AED50,000 bank guarantee or cash required to undertake customs clearance activity while bank guarantee or cash paid by existing customs clearance companies was refunded.

 

The IHS Markit Dubai Purchasing Managers’ Index rose to 46 in May from a record low 41.7 in April, remaining below the 50 mark that separates contraction from growth.

Thanks to a relaxation of lockdown measures, output and new orders declined at a slower rate, while unemployment had the smallest drop in three months.

However, while business expectations for the next 12 months inched higher in May, overall sentiment was still the second-weakest in the survey history, a signal of “only modest optimism toward a recovery in output,” according to IHS Markit.

Sheikh Hamdan said: “We learned from our grandparents to conquer the impossible. Our ambitions are covered by the sky.”

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