View of part of the Fujairah Corniche and the Hajar Mountains in the Background

Friday, October 10, 2008

Dubai’s Heavy Debt Concerns Wall Street

The Wall Street Journal (10 October 2008) is concerned at Dubai’s mounting international debt load and its ability to fund its ambitious growth strategy.

It says:
“Dubai doesn't have big reserves of hydrocarbons. Instead, it has been bankrolling much of its building boom through international debt markets. With those all but shut these days, analysts are warning of a slowdown if global markets don't free up soon.”

“Dubai is among the most heavily indebted governments in the wealthy Persian Gulf. Standard & Poor's estimated at the end of last year that Dubai government debt represented 41.8% of its gross domestic product, compared with 22% in Bahrain and 2.9% in Abu Dhabi.”

“Still, many analysts and economists say chances of the government getting into real trouble remain low. Most assume that next-door-neighbor Abu Dhabi, one of the world's largest oil producers, would extend a lifeline.”

Follow this link for the full article:
Dubai's Heavy Debt Load Stirs Concern, WSJ, 10 October 2008

Dr Geoff Pound

Image: Dubai’s debt load: a Middle East comparison. (Courtesy of WSJ at above link)