The New Year’s Eve fire at The Address received global attention and saw the world’s media at its worst. For instance, Sky News were reporting that the fire was at The Torch in JBR, some 20 km away, whilst its first two on the spot eye witnesses were an English visitor at Meydan racecourse (some 5 km away) and a guy from Middlesex, UK (a lot further afield!). There was also talk of the tower falling, even though the fire was less than an hour old!

The UK’s MailOnLine had a headline “Panic In Dubai as inferno rips through 63-storey hotel”, whilst CNN came up with the dramatic “Fire engulfs downtown Dubai’s high-rise Address hotel”. There was little mention of the professionalism of the civil defence personnel that had the fire 90% under control within an hour and ensured that the packed hotel was safely evacuated, with only 16 people suffering minor injuries. Investigations are taking place but it has been confirmed that the fire started on the 20^th floor and that the south-facing façade of the building and the lobby have been badly damaged.

Despite all this, the spectacular 26-minute firework display went ahead, as planned. Being Dubai, there was never any doubt that the show would go ahead.

HH Sheikh Mohammed bin Rashid al Maktoum has approved the emirate’s 2016 budget which sees an 11.9% jump in public spending to US$ 12.6 billion. It is expected that increased revenues (boosted by an estimated additional 12% from government services) will ensure a balanced budget next year; only US$ 630 million of the spend will be utilised to service Dubai’s debt.

As the federal government has cut back on spending (down 21.6% to US$ 21.3 billion in Q3), in the wake of sinking oil prices, it seems that its 2015 fiscal deficit will be smaller than originally forecast. With a US$ 3.5 billion Q3 shortfall – and US$ 9.3 billion for the first nine months – the YTD deficit equates to 2.1% of GDP – a lot lower than the latest IMF forecast of 5.5%. The impact of low oil prices can be gleaned from the fact that Q3 oil revenue fell by over 31% to US$ 17.8 billion, compared to the same period in 2014. In contrast, the Saudi 2015 budget deficit reached US$ 98 billion, as spending topped US$ 260 billion, with revenue down to US$ 162 billion.

In a move to satisfy demand for more affordable homes, wasl properties is set to release 280 units (in 7 of its 23 buildings) in the Muhaisnah oasis II development. The remaining 964 apartments will be released in Q1 2016.

Danube Properties launched their 5^th project – the US$ 82 million, 450-unit Ritz, located in Al Furjan. Also targeted at the lower end of the market, this will bring the developer’s portfolio to 1.6k, with a value of US$ 409 million (or US$ 262k per unit). The company is bullish about the local housing market, as it estimates that the population could grow by 41% over the next five years to 3.4 million; this equates to at least an annual supply of 18k properties to meet such demand.

2016 will see work start on Dubai’s Taaj Arabia, located on 20 acres in Falcon City of Wonders in Dubailand. Developed by Link Global Group, the project will comprise a 400-key hotel, 300 serviced apartments and a 2k-pax wedding hall. Twice the size of the original Taj Mahal, this will be the first of other global structures – including the Great Wall of China, the Hanging Gardens of Babylon, the Leaning Tower of Pisa and the Pyramids – to be built in the Salem Ahmad Al Moosa development.

It is reported that several outlets are making best use of their Burj Khalifa location by charging customers for eating there on New Year’s Eve. If you have US$ 817, you can try a special set menu at either Fortnum & Mason or Joe’s Café; US$ 545 will be the cost at Japengo Club, PI Dubai and Social House, whilst a burger meal at 5 Guys will set you back only US$ 327! (Meanwhile online ticket sales site Attractiontix has ranked the 828 mt tower as the number 1 international tourist attraction).

Euromonitor International forecast a credible 7.0% increase in the 2016 UAE retail market to US$ 53.7 billion, despite on-going drags from sinking oil prices, the strong currency and a marked spending drop from Chinese and Russian tourists. In 2015, Dubai retail space rose by 200k sq mt and, with a further 400k sq mt expected next year, the total stock will reach 3.4 million sq mt.

Whilst retail can weather the storm, the hospitality industry could be in for a tough 2016 mainly due to factors beyond the sector’s control. Occupancy levels could drop to 75% with the impact of regional unrest, heightened security alerts and a global slowdown that will see tourist numbers falling as well as visitors spending less.

Emirates has reported a 9.0% rise in 2015 passenger traffic to 51.3 million covering over 186k flights to over 150 destinations, having added 6 over the year. The world’s largest international carrier now has a fleet of 248 aircraft – including 156 777s and 73 A380s.

Dubai-based DM Healthcare is planning a US$ 250 million, 3-year expansion plan, as it aims to benefit from the burgeoning GCC healthcare market. Growing at an annual rate of 12%, the market is valued at just under US$ 50 billion this year.

Current “inhabitants” of the 1.5 hectare zoo on Jumeirah Road will be a little happier to learn that by Q3 next year, they will move to a more spacious habitat. The new US$ 41 million, 119 hectare facility, incorporating a safari park, will be located at Al Warqa, adjacent to Dragon Mart, and will house 1k animals.

According to International Expo Consults, revenue from Dubai’s upcoming theme parks will top US$ 5 billion by 2020, with a PwC report indicating visitor numbers at 18 million. Two of the three main parks are set to open in 2016 – IMG Worlds of Adventure in Q1 and Dubai Parks & Resorts in Q4 – with the recently announced 20^th Century Fox World following in 2018.

The Ministry of Labour has abolished the long-established practice of a 6-month ban on foreign workers and restrictions on the transfer of sponsorship. Two of the main benefits will be that, as the number of disputes dwindles, court time will be reduced and expat unemployment will lessen, as workers can start new jobs immediately and no longer be unemployed for six months.

The UAE Space Agency has signed an MoU with the China National Space Agency to exchange information, studies and scientific data in the field of space exploration. This is just one area in which the country is expanding its ties with China, following the recent visit of Abu Dhabi’s Crown Prince, Sheikh Mohammed bin Zayed Al Nahyan.

There was good news for motorists to start 2016, with the announcement that fuel prices will fall as Special (95 octane) drops 6.0% to US$ 0.46 per litre. (Even Australia has seen massive reductions in fuel prices, now retailing as low as US$ 0.80 per litre).

Despite all the external economic and political problems including the massive drop in oil prices, Dubai’s non-oil foreign trade is holding up comparatively well, with Q3 and nine months’ figures showing US$ 85.5 billion and US$ 263.2 billion (compared to US$ 269.2 billion in 2014). Imports accounted for US$ 162.7 billion of the total, with reexports and exports coming in at US$ 73.3 billion and US$ 27.2 billion respectively. Over that period, direct trade – at US$ 164.2 billion – was the highest contributor (62.4%), followed by free zones – US$ 92.6 billion, 35.2% – and customs warehouses, US$ 6.2 billion.

The DFM opened Sunday at 3137 and closed the week (and year) on Thursday (31 December 2015) 14 points up at 3151. Both bellwether stocks, Emaar Properties and Arabtec, remained at least week’s level US$ 1.55 and US$ 0.34 respectively. Trading volumes on Thursday fell with only 182 million shares, valued at US$ 74 million, changing hands, (cf 489 million shares for US$ 153 million, the previous Wednesday).

December continued to be a bad month for both oil and gold, with Brent crude down 3.9% (US$ 1.49) to US$ 36.40 and gold US$ 16 lower at US$ 1,060 by Thursday (31 December) close. Latest research from Deutsche Bank indicates that the UAE breakeven price is US$ 65 per barrel.

Chang Xiaobing, chairman of state-owned China Telecom, has joined a long list of high profile executives being investigated for corruption. This year, Jiang Jieman, China National Petroleum Corporation, Xu Jianyi, China FAW Group, Shen Hao, 21st Century and Cheng Boming, CITIC Securities, have all lost their number 1 positions and faced the wrath of the law. Whether these are political victims, or a serious attempt by the government to weed out corruption, remains to be seen.

Nathan Tinkler, once Australia’s youngest billionaire and mining magnate, is back in the game. His Australian Pacific Coal company has paid a meagre US$ 36 million for an 83.3% share in the Dartbrook mine in the Hunter Valley. It is hoped that the mine, which has been on care and maintenance for the past decade, will produce 5 million tons a year.

Having already been hit with a US$ 70 million fine last month for safety violations, Takata could be facing a further US$ 130 million in deferred penalties. This comes after an 8^th US death, linked to a faulty airbag inflator, has been reported. To date, the problem has seen the recall of 19 million vehicles from 12 different carmakers.

In a bid to bolster its finances, and try to recover from its Q3 U$ 6.6 billion loss, Deutsche Bank has sold its 20% shareholding in China’s Hua Xia Bank. It is reported that the state-owned Chinese insurer, PICC Property and Casualty Company, paid US$ 4 billion for the stake.

Having booked US$ 963 million profit to an Irish subsidiary, (with a lower tax regime), for the six years to 2013, Apple Inc has been reportedly fined US$ 348 million to settle a claim in the Italian courts. Too many international companies appear to have done sweetheart deals with countries such as Ireland, Luxembourg and the Netherlands; now the EU is keen to crack down on these types of tax avoidance schemes. Interestingly, the current EC president is one Jean Claude Juncker, former prime minister of Luxembourg from 1995 – 2013 (and Minister of Finance from 1989 – 2009) at a time when most of these nefarious plans were being introduced!

Brazil’s economy goes from bad to worse, as its public sector deficit reached US$ 5.1 billion in November – a massive 70.4% hike month on month. The country continues in recession (with a Q3 contraction of 1.7%), inflation is soaring into double digit territory and unemployment, at 7.5%, continues its upward spiral. Brazil has not been helped by weak government, apparent pandemic corruption and low commodity prices and will be hoping for an economic boost from this summer’s Olympic Games.

Prime Minister Shinzo Abe still has a long way to go to reach his 2.0% inflation target, as November saw a weak 0.3% return (down 0.3%, month on month). He would also be disappointed in the rising number of unemployed – now at 3.3% – whilst wages and household spending have slipped 1.4% and 2.9% respectively over the year. The Japanese economy has a way to go to ensure a sustained recovery and needs further government stimulus to make it happen.

Earlier in the month, French authorities fined 20 package delivery firms US$ 61 million for price-fixing. This week, it was the turn of the Chinese, with 7 major shipping companies being penalised a total of US$ 65 million for the same type of offence – coordinating bids and routes, when transporting vehicles globally.

The IMF is expecting a problematic year ahead with feeble growth and falling commodity prices adding to a period of uncertainty in 2016. Both Fed interest rate hikes and disappointing Chinese growth figures will cause further problems for emerging economies, with high US$ debt levels and reliance on commodities for a major part of their export earnings.

It has been a disastrous year, as can be seen from the table below which shows all but two indices (cotton and the CS1300) in negative territory. However, the bottom of the cycle may occur quicker than most expect and, that being the case, a welcome improvement may be seen by the end of June.

With regard to the local environment, the 2016 forecasts include:

• Real estate prices flattening and then improving mid-year so, that by June, expect a 5% upturn as rentals returns fall with actual rents remaining unchanged
• Retail and commercial sectors will see a supply surplus which could result in marginal price decreases in H1
• The hospitality sector could have a troubled time with lower occupancy rates (down to 76%) – expect some deals for Dubai residents, especially in dining outlets
• H1 passenger numbers at Dubai International will top 42 million
• Local airlines will introduce more special offers
• Special (95 Octane) petrol prices will be 8.7% higher at US$ 0.50 per litre by June and there could be slight increases in either Salik or parking charges
• DEWA charges may edge higher
• Certain government fees will increase by up to 7%
• Oil prices will head north and Brent crude should top US$52 by June – unless a major political / economic event takes place
• Although global coffee prices will be half of its December 2013 value, Dubai outlets will continue charging at the current level
• Dubai trade figures will continue heading north, despite the global slowdown, and will reach US$ 180 billion by June
• School fees will remain constant in H1 but are set to fall in Q4, as supply starts to outstrip demand
• Inflation in the emirate will continue downwards and will be lower than 3.0% by the end of H1
• The Dubai Financial Market General Index will recover 9.5% and will be higher than 3,450 over the next six months with Emaar Properties and Arabtec trading at US$ 1.70 and US$ 0.40 respectively
• With the hospitality and other sectors reeling from a strong greenback, there has to be a possibility of the UAE abandoning its rigid peg to the US$. (A slightly weaker dirham could prove a lifeline to parts of the Dubai economy)

There is no doubt that Dubai’s economy would benefit from a little more positivity in the market, with too many doom and gloom merchants taking centre stage. At the start of 2016, business confidence is sadly lacking and, for Dubai to prosper in a global slowdown, it is time for many more to Look On The Bright Side Of Life.