Dubai’s economy grows 3.2% in H1 2023

Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai Executive Council, hailed the strong performance of the emirate’s economy in the first half of 2023. With a growth of 3.2 percent in H1 2023, compared to the same period last year, the economy’s total value has reached Dhs223.8 billion.

“The economic expansion is consistent with the goals of the Dubai Economic Agenda D33 to double GDP growth over the next decade and consolidate the emirate’s position as one of the world’s top three urban economies,” Sheikh Hamdan said, noting that this rapid economic growth is a natural outcome of the forward-looking vision of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, to invest in people and create the conditions to ensure continuous development of Dubai’s investment environment.

The emirate’s positive economic performance was driven by remarkable growth in sectors such as transportation, wholesale and retail trade, financial and insurance, accommodation and food services, real estate, information and communication and manufacturing.

These sectors collectively contributed to approximately 93.9 percent of H1 growth, with the transportation and storage sector leading with 42.8 percent, followed by trade at 12.9 percent, and the financial and insurance activities sector at 9.9 percent, according to figures released by the Dubai Data and Statistics Establishment, one of the entities under the Digital Dubai umbrella. The exceptional performance was driven by a 3.6 percent growth in real GDP in Q2 2023.

Helal Saeed Almarri, Director General of Dubai’s Department of Economy and Tourism, commented, “With this sustained economic growth, we are seeing actionable momentum as a direct result of the coordinated city-wide delivery of the Dubai Economic Agenda, D33, in line with the vision of Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.

“We are committed to the acceleration of all projects under D33 and the crystallisation of these critical economic levers, so we can continue to build the enabling ecosystem and regulatory framework for sustainable economic development, enhanced global attractiveness and a hyper-connected network for both increased expansion and inbound investment.”

Hamad Obaid Al Mansoori, Director-General of Digital Dubai, commented on the results, stating that “the growth achieved in the first half of 2023 reflects the overall performance of Dubai’s economic ecosystem, which, in turn, aligns with the government’s efforts to create favourable conditions for investment, enhance business competitiveness, increase foreign trade and promote digital transformation in the emirate’s economy.”

“These impressive figures we are witnessing today represent a remarkable success in achieving and exceeding our goals,” he added. “All of this is driven by a clear and integrated strategy outlined by our leadership, which, over time, has firmly proven its ability to overcome challenges. I applaud the efforts made by all relevant parties and their solidarity and collaboration to achieve Dubai’s most ambitious economic objectives and implement the directives of our leadership.”

“Dubai has cemented its reputation as a world-leading city, as well as a role model that millions aspire to and strive to emulate,” Al Mansoori asserted. “As our remarkable economic growth continues to exceed expectations, the emirate’s model is reinforced as a promising prototype and clear embodiment of the economies of the future.”

Younus Al Nasser, Chief Executive, Dubai Data and Statistics Establishment, Digital Dubai, said, “The economic growth we have seen across various sectors and activities reflects the resilience of the emirate’s economy and its commitment to achieving its economic targets outlined in the Dubai Economic Agenda D33.

The Dubai Government’s efforts and the exceptional empowerment it gives to the Dubai economy, including governance, legislative integration, comprehensive infrastructure, competitive logistics services, and exemplary agility, all make the emirate’s economy the most adaptive and fastest to recover.”

“The Dubai Data and Statistics Establishment calculates economic performance according to international standards and scientific principles, relying on recent, accurate and comprehensive data, and employing the latest data techniques, in line with Dubai’s aspirations in digital transformation,” Al Nasser continued.

“This, in turn, reflects the government’s strong belief that data forms the foundation of digital transformation, enabling a precise understanding of reality, informed decision-making, and future forecasting and planning.”

Hadi Badri, CEO of Dubai Economic Development Corporation, Dubai Department of Economy and Tourism (DET), said, “The strategic vision of Dubai’s leadership coupled with the collaborative spirit of the government and private sectors, continue to be the driving force for Dubai’s buoyant economic growth.

We continue to focus on the strategic initiatives under D33 to prioritise their delivery, in tandem with building out an even more comprehensive roadmap of projects, economic unlocks and critical enablers for sustainable growth across all key sectors.”

Trade activities achieved an added value of Dhs53.6 billion in H1 2023, growing by 1.7 percent compared to the same period in 2022, and contributing 23.9 percent of the GDP and 12.9 percent of total growth. Trade activities are vital for Dubai’s economy and for the wider region, as they effectively contribute to sustainability and economic prosperity.

Transportation and logistics outperformed all other sectors with a significant growth of 10.5 percent in H1 2023, compared to the same period last year. The sector contributed 42.8 percent to the overall recorded first-half growth, generating Dhs31.4 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 volume. The sub-sector’s performance was positively impacted by the increase in the demand for the services of national carriers, which recorded 56 percent growth in passenger numbers in the first half of 2023, compared to the same period last year.

The hotel and food services sector reported a 9.2 percent growth rate in the first half of 2023, with an added value of about Dhs7.9 billion. The sector contributed 3.5 percent to the economy and 9.5 percent to overall growth The emirate welcomed 8.55 million international visitors with 20 percent growth, compared to the same period last year, exceeding the number recorded prior to COVID-19, when the city welcomed 8.36 million international visitors in the first half of 2019, according to figures from Dubai’s Department of Economy and Tourism.

This further enhances Dubai position as the world’s favourite tourist destination. The data issued by the DET underlines the emirate’s status as the fastest-recovering destination in the world.

A report published by Digital Dubai’s Dubai Data and Statistics Establishment showed that real estate activity grew by 3.6 percent, contributing 8.2 percent to the overall economy and 9.2 percent to total growth. This was driven by growth in real estate sales in the first half of this year, according to data from the Dubai Land Department, as well as the flexibility and attractiveness of the sector, the transparency guaranteed to investors and the trust that they have in the sector.

Financial and insurance activities achieved a growth of 2.7 percent during the first half of 2023, contributing 11.9 percent to the GDP, with an added value of Dhs26.6 billion, in addition to contributing 9.9 percent to the total growth. UAE Central Bank data indicate that the volume of credit and deposits grew by an average of 9 percent compared to the same period of the previous year.

Information and communications activity recorded a 3.8 percent growth in the first half of 2023, compared to the same period in 2022, achieving an added value of Dhs9.6 billion and contributing 5 percent of the total growth.

Meanwhile, other economic sectors achieved growth of 0.7 percent during the first half of 2023, and together contributed a combined 6.1 percent of the total growth.

WAM