Dubai: Economy grows 3.2% in H1 2023

Dubai’s economy witnessed a growth of 3.2 per cent in H1 2023, compared to the same period last year.

The economy’s total value has reached Dhs223.8bn, reported Dubai Media Office.

“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,” said Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai Executive Council.

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 per cent of H1 growth, with the transportation and storage sector leading with 42.8 per cent, followed by trade at 12.9 per cent, and the financial and insurance activities sector at 9.9 per cent, 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 per cent growth in real GDP in Q2 2023.

Dubai focused on economic targets outlined in the Dubai Economic Agenda D33

Helal Saeed Almarri, director general of Dubai’s Department of Economy and Tourism, said, “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 HH 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 H1 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.”

Younus Al Nasser, chief executive, Dubai Data and Statistics Establishment, Digital Dubai, said, “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 added: “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, “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, and other highlights

Trade activities achieved an added value of Dhs53.6bn in H1 2023, growing by 1.7 per cent compared to the same period in 2022, and contributing 23.9 per cent of the GDP and 12.9 per cent of total growth.

Transportation and logistics led other sectors with a growth of 10.5 per cent in H1 2023, compared to the same period last year. The sector contributed 42.8 per cent to the overall recorded H1 growth, generating Dhs31.4bn 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.

The sub-sector’s performance was positively impacted by the increase in the demand for the services of national carriers, which recorded 56 per cent growth in passenger numbers in H1 2023, compared to the same period last year.

The hotel and food services sector reported a 9.2 per cent growth rate in H1 2023, with an added value of about Dhs7.9bn.

The sector contributed 3.5 per cent to the economy and 9.5 per cent to overall growth.

The emirate welcomed 8.55 million international visitors with 20 per cent 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 H1 2019, according to figures from Dubai’s Department of Economy and Tourism.

A report published by Digital Dubai’s Dubai Data and Statistics Establishment showed that real estate activity grew by 3.6 per cent, contributing 8.2 per cent to the overall economy and 9.2 per cent to total growth. This was driven by growth in real estate sales in H1, 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 per cent during H1 2023, contributing 11.9 per cent to the GDP, with an added value of Dhs26.6bn, in addition to contributing 9.9 per cent to the total growth. UAE Central Bank data indicate that the volume of credit and deposits grew by an average of 9 per cent compared to the same period of the previous year.

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

Meanwhile, other economic sectors achieved growth of 0.7 per cent during H1 2023 and together contributed a combined 6.1 per cent of the total growth.

Read: UAE economy primed for stronger growth in H2 2023