Dubai faces off 5.5% recession this year as $10 billion debt repayments loom: BofA



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Dubai faces off 5.5% recession this year as $10 billion debt repayments loom: BofA

On Sunday, the Charlotte-based American multinational lender, Bank of America said in a research note that the economy of Dubai had been headed towards a 5.5 per cent recession this year, while compounding the narratives further for the Mideast Financial HubSpot, the US lender had also added that Dubai was facing off a total of $10 billion in bond maturities this year, stoking possibilities of a debt default amid a multi-year low crude oil prices alongside a perilous plunge in service sector activities brewed off the pandemic-led demand rout.

Aside from that, as Dubai wrestles with a likely recession of at least 5.5 per cent in 2020 with a $10 billion bond repayment looming large over the horizon, pointing towards further pains ahead for the popular-most Emirate in the United Arab Emirates, widely known for its lively night lives, luxury malls and ultramodern architectures, the Bank of America’s research note published on Sunday had also added that the Emirati economy’s revenue would likely to witness the steepest drop on record this year since the era of Great Financial Depression of 2007-2009.

Dubai fiscal deficit set to climb with $10bn bond repayment due in 2020

Meanwhile, as the Emirati economy, significantly less oil-rich than its wealthy neighbour Saudi Arabia with a reserve of roughly 4 billion barrels of Dubai crude, which would likely to phase out over the next five years, had the Dubai Government kept pumping crude at its current level of 3.06 million barrels per day, seemed to be grasping for breathes amid a pandemic-led demand rout in its tourism industry and a multi-year low crude oil prices, adding further strains on to the ailing economy of Dubai, the Bank of America research had also added that the Emirati nation might witness a contemptuous widening of its fiscal deficit up to 3.9 per cent of its GDP (Gross Domestic Product) or $4.4 billion apart from a $10 billion in sovereign debt maturities this year and a recession at large.