Economic Slowdown of
Presented By : Nikunj Patel
• One of the seven emirates of UAE
• Ruled by the Al Maktoum dynasty since 1833
• Major Revenue Sources
•Petroleum & natural gas
•Property & construction
Sectoral Composition of GDP of
9% Real estate &
Source : CARE, Emerald insight
Dubai Financial Crisis
• The Dubai government’s total debt was $80 bn. till
• Dubai World burdened with $59 bn liabilities
• Dubai World had declared a six month standstill on its
debt repayment to its lenders
• Nakheel has a debt of $26bn
Reasons For The Crisis
• After 2003- Dubai economic model- More debt & less equity.
• Global Economic Crisis
• Shipping industry
• Real estate prices collapses
• Government restrictions were low.
• No strict lending standards and low interest rates.
Impacts of Dubai Crises
• Impact on Banking
• Fall in real estate prices
• Unemployment problem may arise in Dubai.
• Drop in demand of Gold
• Immediate drop in oil prices
Impact on Asian Stock Market
• Hangsang (Hong kong ) 4.8%
• Nikkei (Japan) 3.2%
• BSE (India) 2.0%
• Kospi (Seoul) 4.7%
Indian Banks In
Indian Bank Exposure
• Bank of Baroda has some real estate exposure to Dubai
which is around five per cent of its loan book account.
• State Bank of India has an exposure of Rs 1,443 crore or
0.2 percent of total assets in the UAE
• Such loans are issued for very short periods (3-6 months).