According to a recent survey by the Dubai Chamber of Commerce, 70% of Dubai companies will be filing for bankruptcy or going out of business within the next 6 months due to the negative effects of COVID 19 on the economy. The study questioned over 1200 businesses over last April of which 27% declared that they would be going out of business in May 2020 with an additional 43% estimating to go out of business within the next 6 months.
Dubai Chamber of Commerce Spokesman says “We anticipate business confidence will improve significantly in the coming weeks and months as businesses return to more normal operation”. Dubai is one of the middle east’s most diversified economies with minimal dependence on oil exports hosts world renowned resorts and restaurants with a growing entertainment sector.
According to the survey the Dubai Chamber of Commerce, over 74% of travel and tourism companies are expected to close within the next 6 months with over 30% of transport and storage companies even closing. However businesses are starting to slowly recover with malls and selected retail businesses granted permission to operate at 30% capacity during the Muslim holy month of Ramadan.
This blow from COVID19 pandemic to the economy of Dubai came at a time when the Gulf state has already been experiencing decline in economic revenues from key sectors such as hospitality and real estate. Prices of residential estates had already fallen by 30% compared to their peak at 2014 due to oversaturation with revenue per hotel room down by more than 25% compare to its peak in 2015.