Dubai Well Placed To Bounce Back, Maintain Financial Hub Status, Say Report

(MENAFN- Khaleej Times) Dubai is well placed to emerge from the Iran war with its position as the Gulf's leading financial and commercial hub intact, according to a new report by Capital Economics.

In the analysis, William Jackson, chief emerging markets economist, and Jason Tuvey, deputy chief emerging markets economist, said the authorities“seem to be doing all the right things” and that early evidence is encouraging.

Recommended For You

Stay up to date with the latest news. Follow KT on WhatsApp Channels.

Growth in some of the emirate's non-oil sectors slowed after the regional conflict broke out on February 28. However, measures taken by the authorities are helping the economy get back on its growth trajectory.

Whether it was the Covid-19 pandemic or the 2008-09 financial crisis, the emirate has emerged stronger from every major crisis, supported by its innovative, business-friendly economic policies, residency programmes and measures to support the private sector.

The emirate has also rolled out more than Dh2.5 billion in economic incentives following regional crises, supporting local businesses, the hospitality sector and corporate liquidity.

Recovery

The economists pointed to signs of a turnaround and economic growth.

The S&P Global Dubai Economy Trackers for August showed recoveries in construction, wholesale and retail trade, and tourism.

In finance, fixed income issuance has been strong, as has trading in both equities and bonds.

The banking sector is well capitalised, and Dubai's government-related entities have reduced their debt since the 2009 crisis, the report said.

It added that confidence indicators are also improving, pointing to a large number of residency permits issued during 2026 as people flock to the emirate.

Capital Economics also highlighted the New Civil Code, in force since June, which it said is widely seen as a welcome modernisation of the legal framework governing contract enforcement. It also cited more easier UAE visa rules, including easier extensions and arrivals through job seeker, real estate investor and family routes.

State investment has stayed on course, including the expansion of Etihad Rail to Dubai. The emirate is also pushing aggressively into artificial intelligence, from AI in government services to infrastructure for AI firms and access to top-end US technology. The UAE has also strengthened air defences, which the report said proved very capable in the early stage of the conflict.

The economists said Dubai is emerging with“a more favourable legal” environment for businesses and visitors.

Strong foundations

The report noted that Dubai's economy grew from around $17 billion in 2000 to $260 billion last year, faster than other Gulf economies, while its population has quadrupled this century. It surpassed 4.58 million mark at the end of July 2026.

Importantly, Dubai was also recently ranked among the top ten global financial centres in the latest Z/Yen survey, well ahead of the rest of the Gulf.

Capital Economics assessed historical cases of hubs hit by shocks, including London, Frankfurt, Singapore, Hong Kong and New York. It found that recovery depends on four factors: whether risks recede, whether institutions stay intact, whether reforms follow, and whether a rival is waiting to take business.

Dubai's institutional framework has not been undermined by the war, the report said. On competition from Riyadh, it said the odds“look favourable” for Dubai given its stronger starting position and more attractive environment for foreign workers.

The economists said Dubai's authorities are acting in line with the D33 agenda, which aims to double the size of the economy between 2023 and 2033 and place Dubai among the top four global financial hubs.

ALSO READ

UAE poised for rebound as oil exports recover, fiscal buffers cushion war shock Dubai property thrives despite regional crisis: What investors need to know How Dubai's economy powers ahead despite regional conflict

MENAFN24092026000049011007ID1111708051