Economic growth in Dubai is forecast to remain at about 4.5 per cent during 2013 and 2014 according to Mohamed Lahouel, chief economist at the Dubai Department of Economic Development (DED).

The DED is forecasting growth of about 4.5-4.7 per cent for 2013 and 4.5 per cent for the following year. “This will be driven by the trade, tourism and manufacturing sectors,” says Lahouel.

Dubai has quickly recovered from a recession in 2009 when the economy shrank by 2.7 per cent. In the first six months of 2013, the economy grew by 4.9 per cent.

The return of economic growth has helped Dubai to refinance billions of dollars of debt held by government-owned firms at cheaper rates. It still faces large repayments over the next few years. “The debt due over the next four years is around $85bn,” says Masood Ahmed, Middle East director for the Washington-headquartered IMF.

Part of these repayments will be about $20bn from the Central Bank of the UAE and two Abu Dhabi based banks, and the first tranche of the Dubai World and Nakheel debt restructurings.

He adds that Dubai’s total debt to gross domestic product (GDP) ratio is about 100 per cent, which he says is a “sustainable ratio and Dubai has been able to manage this so far”.