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Dubai’s economy soars: 3.2 percent growth in H1 2023, reaching AED223.8 bn

GDP grew 3.6 percent in Q2
Dubai’s economy soars: 3.2 percent growth in H1 2023, reaching AED223.8 bn
Dubai skyscrapers

Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, the Crown Prince of Dubai and Chairman of Dubai Executive Council, expressed his admiration for the impressive economic performance of the emirate during the initial six months of 2023. The economy experienced a remarkable growth rate of 3.2 percent in H1 2023, surpassing the figures from the corresponding period in the previous year, resulting in a total value of AED223.8 billion ($60.9 billion).

Read more: UAE economy to grow by 3.3 percent in 2023: Report

The emirate’s economy witnessed a notable upswing, propelled by significant growth in several key sectors. These sectors encompassed transportation, wholesale and retail trade, financial and insurance services, accommodation and food services, real estate, information and communication, and manufacturing. Together, these sectors accounted for approximately 93.9 percent of the overall growth in the first half (H1) of the year. According to data released by the Dubai Data and Statistics Establishment, an entity operating under the Digital Dubai initiative, the transportation and storage sector took the lead with a growth rate of 42.8 percent, followed by trade at 12.9 percent, and the financial and insurance activities sector at 9.9 percent. This exceptional performance was further supported by a 3.6 percent increase in real GDP during the second quarter (Q2) of 2023.

Crucial role

During H1 2023, trade activities in Dubai generated an additional value of AED53.6 billion, exhibiting a growth rate of 1.7 percent compared to the corresponding period in 2022. This remarkable performance contributed significantly to the overall GDP, accounting for 23.9 percent, and played a crucial role in the total growth, representing 12.9 percent. Trade activities hold immense importance for Dubai’s economy and the broader region, as they play a pivotal role in fostering sustainability and driving economic prosperity.

Dominant sector

The transportation and logistics sector emerged as the top-performing sector, exhibiting a remarkable growth rate of 10.5 percent in the first half of 2023 when compared to the corresponding period of the previous year. This sector made a significant contribution of 42.8 percent to the overall recorded growth during this period, generating an added value of AED31.4 billion. The scope of the transportation and storage sector encompassed various activities such as land transport for individuals and goods, maritime transport, handling and storage, postal services, air transport for individuals and goods, and related supporting activities.

Within the transport and storage sector, air transport holds the largest share due to its substantial volume. The performance of this sub-sector was notably influenced by the heightened demand for the services provided by national carriers, which witnessed an impressive 56 percent growth in passenger numbers during H1 2023, as compared to the corresponding period in the previous year.

Dubai economy

Notable visitor influx

In H1 2023, the hotel and food services sector demonstrated a growth rate of 9.2 percent, contributing an added value of approximately AED7.9 billion. This sector accounted for 3.5 percent of the overall economy and made a significant contribution of 9.5 percent to the overall growth. The emirate of Dubai experienced a notable influx of international visitors, with 8.55 million individuals arriving, marking a 20 percent increase compared to the same period in the previous year. These figures surpassed the pre-COVID-19 record of 8.36 million international visitors in H1 2019, as reported by Dubai’s Department of Economy and Tourism. This achievement further solidifies Dubai’s position as a favored global tourist destination. The data released by the Department of Economy and Tourism underscores Dubai’s reputation as the world’s fastest-recovering destination.

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