The Department of Finance at the United Arab Emirates (UAE)’s emirate of Dubai has informed all government agencies to reduce capital spending as an economic precautionary measure following the coronavirus outbreak.
Reuters quoted a statement by the department, calling on government agencies to “cut administrative and general expenses by at least 20 per cent” and “to halt new hiring”. It also instructed them to suspend all construction projects that have not begun “until further notice”, and not to allow any cost increases for ongoing construction projects.
Since 31 March, Dubai has been sealed off by the local authorities after it was hit by the novel virus. Locals have confirmed that there have been door-to-door coronavirus testing in some parts of the emirate. The virus has brought the emirate’s vital economic sectors such as tourism and transport to a near halt.
Analysts assert that an economic slowdown in Dubai “could wipe five to six per cent off its Growth Domestic Product (GDP) this year,” adding that it could also force the local authorities “to seek a bailout similar to the one extended by Abu Dhabi after the 2009 financial crisis.”
Until now, at least 1,577,747 people worldwide have contracted the virus, of whom more than 93,673 have died; 348,276 have recovered, according to the US’ Worldometers. The World Health Organisation has declared the crisis to be a pandemic.