Dubai’s Real Gross Domestic Product (GDP) grew 2.8 percent year-on-year in the first quarter of the year to reach AED111.3 billion ($816.7 million) surpassing average global growth rates for Q1 2023. The surge in growth maintains the robust momentum achieved in 2022. During that year, the economy of the emirate expanded by 4.4 percent.
According to His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, the high growth in Q1 is a testament to Dubai’s strong fundamentals, sustainability, and resilience. It showcases the city’s ability to foster enterprise and innovation. The sustained growth reflects the ambitious development vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum. Dubai’s exceptional investment environment, robust infrastructure, and business-friendly ecosystem enable it to outpace leading global economies.
Strategic springboard
According to Sheikh Hamdan, the Dubai Economic Agenda D33 has created a strategic springboard. Its goal is to double Dubai’s economy and establish it as one of the world’s top three cities. This agenda will bring about a new cycle of growth and value creation. Sheikh Hamdan stressed the significance of the partnership between the public and private sectors, highlighting Dubai’s continued role in shaping the future of the global economy.
Dubai’s growth in Q1 2023 is significantly higher than that of some of the most developed countries in the world. Data issued by the Organization for Economic Cooperation and Development (OECD) indicate a seasonally adjusted growth of 1.6 percent for OECD countries. The European Union grew by 1.1 percent, while the US economy grew by 1.8 percent in the first quarter of the year.
The transportation and storage sector was the biggest contributor to overall growth at 48 percent. The financial and insurance sector accounted for 15 percent, followed by trade at 10 percent. This data was issued by the Dubai Data and Statistics Establishment of the Dubai Digital Authority.
Inevitable outcome
For his part, His Excellency Hamad Obaid Al Mansoori, director general of the Dubai Digital Authority, commented on the results. He stated that Dubai’s economic success is a result of policies that reflect the leadership’s vision. The goal is to establish Dubai as a leading global hub for business and investment in all sectors. He added that at Digital Dubai, they will collaborate with other government entities. The goal is to sustain the city’s economic momentum. This will involve providing a strong digital infrastructure, top-level cybersecurity measures, seamless access to open data, and creating an environment that supports growth and prosperity.
Sustained momentum
According to His Excellency Helal Saeed Al Marri, the director general of Dubai’s Department of Economy and Tourism, there is sustained momentum in both core sectors and new growth segments of the economy. Strong collaboration among industries and public-private partnerships reinforces this. It aligns with the 10-year Dubai Economic Agenda D33. Comprehensive strategies support the vision. Furthermore, they focus on economic diversification, entrepreneurship, talent attraction, and investment across sectors. The economic framework is crucial for achieving D33’s goals. It aims to elevate Dubai’s position among the top three global cities. The goal is to make Dubai the preferred destination for investment, living, working, and tourism.
Agility and dynamism
According to the report, wholesale and retail trade remains the largest contributor to the economy, comprising 22.9 percent of Dubai GDP. The transportation sector follows closely behind, accounting for 14.1 percent. These results emphasize the dynamic and diversified structure of Dubai’s economy. It highlights the interdependence and interconnectedness of different sectors, leading to synergistic growth.
His Excellency Younus Al Nasser, CEO of the Dubai Data and Statistics Establishment, emphasized the importance of data and statistics in the AI era. He noted that numbers truly reflect economic activity and help understand the present and predict the future. This enables informed decision-making. Al Nasser stated that the data collected by the Dubai Data and Statistics Establishment shows significant economic progress in the emirate. He credited this progress to the leadership’s clear vision and the collaborative efforts of all stakeholders.
1.2 percent growth in trade
The trade sector recorded a 1.2 percent growth in the first quarter of 2023, compared to the same period in 2022, bringing an added value of AED25.5 billion. The sector accounted for 22.9 percent of the economy and contributed 10 percent of overall recorded Q1 2023 growth. It encompasses a wide range of companies dealing in various consumer and capital goods. Trade, which has a notable impact on various other activities, includes some of the largest companies in the country and the region, whose commercial activities cover a wide range of consumer and capital goods.
Read more: Dubai GDP expected to expand by 3 percent: Report
10.3 percent growth in transportation and storage
Transportation and storage sector showed the highest growth among all sectors. It recorded a significant increase of 10.3 percent in Q1 2023 compared to the same period last year. The sector contributed 48 percent to the overall recorded first quarter growth, bringing AED15.6 billion in added value. The transportation and storage sector included activities related to land transport for individuals and goods, maritime transport, handling and storage, postal services, air transport for individuals and goods, and related supporting activities.
Additionally, air transport accounts for the largest proportion of the transport and storage sector given its sizeable production volume. The sub-sector’s performance was positively impacted by the increase in the demand for the services of national carriers, which recorded 68 percent growth in passenger numbers in Q1 2023, compared to the same period last year.
5.6 percent growth in accommodation and food services
The accommodation and food services sector reported a 5.6 percent growth rate in the first quarter of 2023, with an added value of approximately AED4.5 billion. The sector contributed 4.1 percent to the economy and 8 percent to overall recorded growth in Q1. Dubai welcomed 4.67 million international visitors in the given period. This represents an 18 percent increase compared to the 3.97 million visitors in the same period of 2022. The figures are based on data from Dubai’s Department of Economy and Tourism. Various initiatives by stakeholders contributed to these results. Efforts to attract visitors included hosting international conferences and exhibitions throughout the year.
2.4 percent growth in real estate activities
According to the Dubai Data and Statistics Establishment report, real estate activities grew by 2.4 percent. It contributed 7.4 percent to the economy and 6 percent to the overall recorded growth. This growth was driven by an increase in real estate margins on property sales, which significantly grew in Q1 2023, based on figures from the Dubai Land Department.
The real estate sector benefited from the leadership’s directives and the economic stimulus packages offered by the Dubai Government. Additionally, the sector’s flexibility, transparency, and confidence provided attractive opportunities for investors and consumers.
3.2 percent growth in the financial sector
Moreover, the financial and insurance activities experienced a growth of 3.2 percent in Q1 2023. This sector contributed 12.7 percent to Dubai GDP and added AED14.2 billion in value. The sector represented 15 percent of Dubai’s Q1 growth. According to data from the UAE Central Bank, there was a 3.5 percent growth in credit balances and a 14.9 percent growth in deposit balances compared to the same period last year.
Meanwhile, other economic sectors experienced a growth rate of 1.5 percent in the first quarter of 2023, contributing a combined 35.5 percent.
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