Dubai’s GDP grows 2.8% in Q1 2023 to reach Dhs111.3bn

Image credit: Getty Images / WAM

Dubai’s real gross domestic product (GDP) grew 2.8 per cent year-on-year in the first quarter of the year to reach Dhs111.3bn surpassing average global growth rates for Q1 2023, state news agency WAM has reported.

The surge sustains the strong momentum that Dubai’s economy achieved in 2022, with a expansion of 4.4 per cent.

Dubai’s growth in the first quarter of 2023 significantly outpaced the growth rates of some of the most developed nations worldwide.

According to data provided by the Organisation for Economic Cooperation and Development (OECD), these advanced economies demonstrated a seasonally adjusted growth of 1.6 per cent. Comparatively, the European Union displayed a growth of 1.1 per cent, while the US economy expanded by 1.8 per cent in the same period.

Key drivers of growth

The transportation and storage sector contributed 48 per cent to the overall expansion, bringing Dhs15.6bn in added value. It 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.

Following closely was the financial and insurance sector, accounting for 15 per cent and trade, making up 10 per cent of the growth, according to data issued by the Dubai Data and Statistics Establishment of the Dubai Digital Authority.

The trade sector recorded a 1.2 per cent growth in the first quarter of 2023, compared to the same period in 2022, bringing an added value of Dhs25.5bn. The sector accounted for 22.9 per cent of the economy and contributed 10 per cent of overall recorded Q1 2023 growth.

Meanwhile, 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 per cent growth in passenger numbers in Q1 2023, compared to the same period last year.

The emirate welcomed 4.67 million international visitors, a 18 per cent increase from the 3.97 million welcomed during the same period in 2022, according to figures from Dubai’s Department of Economy and Tourism.

Read: Dubai surpasses pre-pandemic international tourism levels in H1 2023

The accommodation and food services sector reported a 5.6 per cent growth rate in the first quarter of 2023, with an added value of approximately Dhs4.5bn. The sector contributed 4.1 per cent to the economy and 8 per cent to overall recorded growth in Q1.

The Dubai Data and Statistics Establishment report revealed that real estate activities grew by 2.4 per cent, contributing 7.4 per cent to the economy and 6 per cent to the overall recorded growth, driven by the growth in real estate margins on property sales, which grew significantly in Q1 2023.

Meanwhile, other economic sectors experienced a growth rate of 1.5 per cent in the first quarter of 2023, contributing a combined 35.5 per cent.

Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai Executive Council, said: “The continued high growth in the first quarter of the year is yet another testament to Dubai’s strong fundamentals, sustainability and resilience and its capacity to constantly create fresh pathways for enterprise and innovation to flourish.

“The introduction of the Dubai Economic Agenda D33, which seeks to double the size of the emirate’s economy over the next decade and consolidate its status as one of the world’s top three cities, has created a strategic springboard to usher in a new cycle of growth and value creation. Powered by the harmonious partnership between the public and private sectors, Dubai will continue to raise its role in shaping the future of the global economy.”

“Dubai’s success in the economic field is an inevitable result of economic policies that express the vision of the leadership to make Dubai a leading global business and investment destination for all sectors, added Hamad Obaid Al Mansoori, director-general of the Dubai Digital Authority.

Helal Saeed Al Marri, director-general of Dubai’s Department of Economy and Tourism, stated: “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. This vision is further fortified by comprehensive strategies centered around economic diversification, entrepreneurship and the attraction of both talent and investment across sectors. This economic framework will continue to serve as a key lever for D33 as we seek to bolster Dubai’s offering as a top three global city, and the best place to invest, live, work and visit.”

Read: Sheikh Hamdan reviews DET progress on Dubai Economic Agenda D33 goals

Younus Al Nasser, CEO of the Dubai Data and Statistics Establishment, said: “Numbers have always been the true mirror that reflect the reality of economic activity, and today, with our entry into the era of artificial intelligence, the importance of data and statistics has increased not only in exploring the current reality, but also in foreseeing the future by analysing statistical patterns to enable decision-makers to make the right call.

The data collected by the Dubai Data and Statistics Establishment reveals the significant economic progress the emirate is making, driven by the clear vision of our leadership, and the collaborative efforts of all stakeholders.”