Much of the downward pressure is coming from Dubai’s failing real estate market, where the forecasts of a recovery in falling prices continue to recede from view. Dubai Ruler Sheikh Mohammed bin Rashid al-Maktoum acknowledged the scope of the issue on 31 August, calling for the need to balance supply and demand. Since then, the Dubai government’s formation of a Supreme Committee for Real Estate Planning has demonstrated the emirate’s commitment to address the issue, while the lack of new project launches at Dubai’s annual Cityscape real estate and investment event will also come as a relief to many.

Yet existing projects alone will still raise residential supply to 659,000 units by the end of 2021 – up 23 per cent from the 536,000 at the end of June this year. This means any attempt to stem the downward spiral of property prices will need to be radical if it is to address the weakness in the real estate sector – leaving aside the question of how this can be achieved while still supporting the emirate’s embattled construction sector.

In the meantime, investors and business people will be looking to other outlets for growth, not least in the potential of stimulus from Abu Dhabi. Much has been promised, yet despite an envisaged rise in federal spending for the 2019-21 period, the evidence suggests no substantial uptick in 2019 expenditure, with revenues continuing to exceed spending in the first half of the year.

If Abu Dhabi is serious about reinvigorating non-oil growth, it will likely need to temporarily set aside its goal of achieving fiscal balance in the near term and instead get back to the business of nation building.

Included in MEED’s UAE special report:

• New test for the UAE’s visionary pragmatists
• UAE economy looks to recapture its appeal
• Adnoc powers the UAE’s gas ambitions
• UAE sees lull in oil and gas contract awards in 2019
• Focus turns to infrastructure as Dubai curtails real estate
• Rail and e-commerce to drive UAE logistics growth
• UAE aims for a clean energy future
• UAE maintains its economic course