Dubai's population will fall by 9 per cent this year as the slowdown in the construction and real estate sectors forces expatriate workers to leave the emirate, according to analysts surveyed by MEED.

Despite government claims that the population is continuing to grow, the consensus among analysts is that Dubai's population will drop 9 per cent, leaving the emirate with a population of 1.5 million by the end of 2009.

The forecast is an average of the predictions of four banks. Egypt's EFG-Hermes forecasts Dubai's population will drop by 17 per cent, Switzerland's UBS forecasts an 8 per cent fall, the local Shuaa Capital 5 per cent, and Saudi Arabia's Samba 6 per cent.

According to the Dubai Statistics Centre - the source of official estimates in the emirate - the population stood at 1.65 million at the end of 2008, up 10 per cent from 1.53 million at the end of 2007.

Analysts say the population will fall as people employed in the construction sector leave the emirate following the severe slowdown in activity.

"We will see a slowdown or contraction in a number of economic sectors, most notably real estate and construction, as projects are cancelled or put on hold," says Monica Malik, Dubai-based chief economist of EFG-Hermes. "We forecast the proportion of the population of Dubai working in the construction sector will fall by 30 per cent in 2009."

Real estate developers, such as Nakheel, have laid off large numbers of staff, and contractors have shed thousands of jobs as developers put projects on hold.

The fall in the population will have a dramatic impact on Dubai's economy. EFG-Hermes says consumption will drop by 13 per cent this year and the overall economy will contract by 1.7 per cent.

Analysts forecast that the depopulation of the emirate will continue as developers complete their existing projects and fail to tender new ones. "We believe Dubai's construction worker population will further decline in 2010 by 5 per cent as projects are completed," says Malik.

Dubai has benefited from a long-term trend of positive population growth.

According to the Economy Ministry, Dubai's population was 183,187 in 1975, and has grown at a rate of more than 5 per cent a year since then, with the exception of the late 1990s, when it dropped to about 4.5 per cent because of the impact of the Asian financial crisis. Between 2000 and 2005, the population grew at an average rate of 7.3 per cent a year.

With so much conflicting data, some analysts warn that all the forecasts are inaccurate.

"Frankly, there seem to be a lot of people in the market making rash forecasts based on a huge amount of guess work," says Simon Williams, chief economist at UK bank HSBC. "I fear they are in danger of overestimating the downturn, just as they underestimated growth during the boom."