Dubai, UAE — 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 ($30.30 billion), surpassing average global growth rates for Q1 2023.
The surge maintains the momentum of, although lesser than, the 4.4 percent expansion of the economy in 2022.
Dubai Crown Prince Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, said: “Supported by its outstanding investment environment, robust infrastructure and business-enabling ecosystem, Dubai continues to outpace some of the world’s leading economies.”
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. This was followed by the financial and insurance sector, which accounted for 15 percent, and trade at 10 percent, according to data issued by the Dubai Data and Statistics Establishment of the Dubai Digital Authority.
Helal Saeed Al Marri, Director General of Dubai’s Department of Economy and Tourism, said: “We continue to see accelerated momentum across both core sectors and new growth segments for the economy, which is being further reinforced by strong cross-industry and public-private collaboration to deliver the vision of our leadership’s 10-year Dubai Economic Agenda D33.”
Agility and dynamism
The report revealed that wholesale and retail trade continued to be the largest contributor to the economy, accounting for 22.9 percent of the GDP, followed by the transportation sector, which accounted for 14.1percent. These results highlight the dynamic, diversified structure of Dubai’s economy, in which the interdependence and inter-connectedness of various sectors create synergistic growth.
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 22.9percent 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.
10.3 percent growth in transportation and storage
Transportation and storage outperformed all other sectors with a significant growth 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.
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.
Accommodation and food services
The accommodation and food services sector reported a 5.6 percentgrowth 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. The emirate welcomed 4.67 million international visitors, a 18 percent increase from the 3.97 million welcomed during the same period in 2022, according to figures from Dubai’s Department of Economy and Tourism.
These results were made possible by the efforts of various initiatives of stakeholders to attract visitors, including international conferences and exhibitions throughout the year.
Real estate activities
The Dubai Data and Statistics Establishment report revealed that real estate activities grew by 2.4percent, contributing 7.4 percent to the economy and 6 percent to the overall recorded growth, driven by the growth in real estate margins on property sales, which grew significantly in Q1 2023, according to Dubai Land Department figures.
The sector benefitted from the leadership’s directives, as well as the economic stimulus packages the Dubai Government offered, coupled by the flexibility, transparency, and confidence that the sector offers to investors and consumers.
Financial sector
Financial and insurance activities recorded a growth of 3.2 percent in the first quarter of 2023, contributing 12.7 percent to the GDP and AED14.2 billion in added value. The sector accounted for 15percent of Dubai’s overall Q1 growth. Data from the UAE Central Bank indicated 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.