Dubai could see a downturn of around 5.5% in 2020 as it faces about $10 billion underwater developments this year while incomes are relied upon to drop in accordance with the example of the 2009 emergency, Bank of America said in an examination note.
Measures to stem the spread of the coronavirus have managed a hit to Dubai's economy, bringing essential businesses like the travel industry and aeronautics to a close to stopping.
Bank of America assesses that Dubai's financial deficiency could extend to $4.4 billion, or 3.9% of Gross domestic product, and could be as high as 5.3% if premium installments on an advance from Emirates NBD, Dubai's greatest loan specialist, are incorporated.
Financing of the monetary deficiency or liquidity infusion into government-related elements (GREs) will probably essentially be by means of credits from ENBD, Bank of America said. Dubai could likewise draw on $1.4 billion in stores at ENBD or issue secretly positioned bonds.
Universal Money related Reserve information puts the Dubai government and GRE obligation at 110% of Gross domestic product, unaltered in ostensible terms since the 2009 worldwide budgetary emergency, however, Bank of America said: "increasingly corporate trouble" was conceivable in a supported downturn.
"Continued income misfortunes could produce corporate dissolvability concerns if the recuperation is shallow," it said.
Referring to IMF information, the bank said Dubai and government-related elements face some $10 billion paying off debtors reimbursements this year.
It said it anticipated that the administration and banks should get support from oil-rich Abu Dhabi and the UAE national bank, if necessary, however, that obligation recoveries from Dubai government organizations in the coming years were more in danger.
Sources revealed to Reuters this month that the legislatures of Abu Dhabi and Dubai were talking about approaches to prop up Dubai's economy by connecting up resources in the two emirates. Dubai denied the report.