Dubai’s Real Gross Domestic Product (GDP) achieved a notable 2.8% year-on-year growth in Q1 2023, reaching AED 111.3 billion, surpassing the average global growth rates for the same period. This surge upholds the vigorous growth momentum witnessed in 2022 when the economy expanded by 4.4%.
Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council commented, “The sustained high growth in Q1 underscores Dubai’s strong fundamentals, sustainability, resilience, and its consistent ability to foster innovation and enterprise.”
The city’s ability to maintain growth further reflects the ambitious vision of Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai. Fueled by a thriving investment environment, robust infrastructure, and a business-friendly ecosystem, Dubai continues to outpace some of the world’s leading economies.
Sheikh Hamdan added, “The introduction of the Dubai Economic Agenda D33, aiming to double the emirate’s economy over the next decade and solidify its global status, is a strategic foundation for a new era of growth and value creation. With a synergistic public-private partnership, Dubai is poised to shape the future of the global economy.”
Dubai’s Q1 2023 growth surpasses that of many developed nations. According to the Organization for Economic Cooperation and Development, OECD countries experienced a seasonally adjusted increase of 1.6%, the European Union grew by 1.1%, and the US economy grew by 1.8% in the same period.
The transportation and storage sector contributed the most to this growth at 48%, followed by the financial and insurance industry at 15%, and trade at 10%, as reported by the Dubai Data and Statistics Establishment of the Dubai Digital Authority.
Hamad Obaid Al Mansoori, Director General of the Dubai Digital Authority, emphasized, “Dubai’s economic success is a direct outcome of visionary economic policies. Our ongoing collaboration with government entities ensures a robust digital infrastructure, cybersecurity, and open data access, fostering an environment conducive to growth and prosperity.”
Helal Saeed Al Marri, Director General of Dubai’s Department of Economy and Tourism, highlighted, “We witness continued momentum across core sectors and new growth areas, driven by robust cross-industry collaboration. Our comprehensive strategies centered around diversification, entrepreneurship, talent, and investment attraction align with the 10-year Dubai Economic Agenda D33, reinforcing Dubai’s position as a top global city.”
The report unveiled wholesale and retail trade maintained its position as the foremost contributor to the economy, constituting 22.9% of the GDP, followed by the transportation sector at 14.1%. These findings underscore Dubai’s dynamic and diversified economic framework, where the interdependence and interconnectedness of sectors drive synergistic growth.
Younus Al Nasser, CEO of the Dubai Data and Statistics Establishment, emphasized, “In the age of artificial intelligence, data and statistics have gained enhanced importance, not only for understanding the present reality but also for forecasting the future through the analysis of statistical trends, aiding decision-makers in making informed choices.”
The data gathered by the Dubai Data and Statistics Establishment highlights the substantial economic advancement achieved by the emirate, a testament to visionary leadership and collaborative efforts across stakeholders.
During the initial quarter of 2023, the trade sector witnessed a growth of 1.2% in contrast to the same timeframe in 2022, resulting in an additional value of AED 25.5 billion. This sector represented 22.9% of the total economy and contributed 10% of the overall growth recorded in Q1 2023. The trade sector holds significance due to its ripple effect on various other endeavors, encompassing multiple businesses engaged in consumer and capital goods. Among its ranks are some of the largest firms within the country and the region, engaged in a broad spectrum of commercial activities involving consumer and capital goods.
In Q1 2023, the transportation and storage sector exhibited remarkable growth, surpassing all other sectors with a 10.3% increase compared to the previous year’s corresponding period. This sector played a pivotal role by contributing 48% to the comprehensive growth observed in the first quarter, thereby introducing an added value of AED 15.6 billion. The activities within the transportation and storage domain encompassed land transport for individuals and goods, maritime transport, handling and storage, postal services, air transport for individuals and interests, and associated supportive functions.
Air transport takes the lead in the transportation and storage sector due to its substantial production volume. The performance of this sub-sector was favorably influenced by the heightened demand for services provided by national carriers. Passenger numbers for Q1 2023 exhibited a noteworthy 68% increase compared to the same period the previous year, solidifying the positive trajectory of this segment.
In Q1 2023, the accommodation and food services sector achieved a 5.6% growth, adding approximately AED 4.5 billion in value. This sector contributed 4.1% to the economy and 8% of the total Q1 growth. The emirate witnessed a rise in international visitors, with 4.67 million welcomed, marking an 18% increase compared to the 3.97 million during the same period in 2022. These figures, sourced from Dubai’s Department of Economy and Tourism, resulted from diverse initiatives by stakeholders, including year-round international conferences and exhibitions to attract visitors.
The Dubai Data and Statistics Establishment report showed a 2.4% growth in real estate activities, contributing 7.4% to the economy and 6% to overall Q1 growth. As the Dubai Land Department reported, this growth was fueled by increased real estate margins on property sales in Q1 2023. The sector’s positive trajectory stemmed from leadership directives and economic stimulus packages by the Dubai Government, bolstered by the sector’s investor-friendly attributes of flexibility, transparency, and confidence.
Financial and insurance activities achieved a 3.2% Q1 2023 growth, contributing 12.7% to the GDP with AED 14.2 billion added value. This sector comprised 15% of Dubai’s total Q1 growth. Data from the UAE Central Bank highlighted a 3.5% increase in credit balances and a 14.9% surge in deposit balances compared to the same period in the prior year. Concurrently, other sectors exhibited a 1.5% Q1 2023 growth, collectively contributing 35.5%.