Dubai Cuts Spending, Suspends Recruitment Amid Pandemic Outbreak

An official document seen by Reuters showed that the Dubai Finance Department informed all government agencies to reduce capital spending by at least half and to stop new recruitment until further notice, in response to the outbreak of the novel coronavirus (COVID-19).

Dubai has been hit hard by the outbreak, as measures to contain the spread of the virus have pushed vital sectors of the economy such as tourism and transportation almost to a halt.

Also, the department informed all government agencies on Wednesday to suspend all construction projects that did not start until further notice and not to allow any increase in spending for ongoing construction projects.

It also demanded a reduction in administrative and public expenses by at least 20%, review the budgets of existing construction projects and postpone any new projects that have not yet begun.

Analysts said that the economic slowdown in Dubai may wipe out between 5-6% of the emirate's gross domestic product (GDP) and may force it to request a financial rescue similar to that provided by oil-rich Abu Dhabi after the financial crisis in 2009.

A survey on Thursday showed that the non-oil private sector in Dubai was hit hard as companies cut jobs to reduce losses, especially in the transportation and tourism sectors.