Dubai’s actual gross domestic product (GDP) increased by 2.8 percent year-on-year in Q1 2023, reaching AED 111.3B, surpassing the average global growth rates for that quarter. This growth continues the robust momentum that Dubai’s economy gained in 2022, expanding by 4.4 percent.
In the first quarter of 2023, Dubai’s growth significantly exceeded the rates of growth seen in several highly developed nations worldwide. According to data from the Organisation for Economic Cooperation and Development (OECD), these advanced economies showed a seasonally adjusted growth of 1.6 percent. By comparison, the European Union exhibited 1.1 percent growth, while the US economy expanded by 1.8 percent in the same period.
Major drivers of this growth were the transportation and storage sector, contributing 48 percent to the overall expansion, bringing in an additional value of AED 15.6B. This included activities related to land and maritime transport, storage, postal services, air transport, and supporting activities.
The financial and insurance sector closely followed, constituting 15 percent of the growth, and trade accounted for 10 percent, according to data provided by the Dubai Data and Statistics Establishment of the Dubai Digital Authority, according to Gulf Business.
The trade sector saw a 1.2 percent growth in Q1 2023 compared to the same period in 2022, contributing AED 25.5B in additional value. This sector constituted 22.9 percent of the economy and contributed 10 percent of the overall Q1 2023 growth.
Air transport had a significant impact on the transport and storage sector due to its substantial production volume. Increased demand for national carriers’ services positively influenced the sub-sector’s performance, leading to a 68 percent growth in passenger numbers in Q1 2023 compared to the previous year.
Contributors to Dubai’s Growth
Dubai welcomed 4.67 million international visitors, an 18 percent increase from the 3.97 million in the same period of 2022, according to data from Dubai’s Department of Economy and Tourism.
The accommodation and food services sector reported a growth rate of 5.6 percent in Q1 2023, contributing an added value of around AED 4.5B. This sector accounted for 4.1 percent of the economy and 8 percent of the overall Q1 growth.
The Dubai Data and Statistics Establishment report revealed that real estate activities expanded by 2.4 percent, contributing 7.4 percent to the economy and 6 percent to the overall growth. Increased real estate margins on property sales in Q1 2023 drove this growth. Meanwhile, other economic sectors experienced a growth rate of 1.5 percent in Q1 2023, contributing a combined 35.5 percent.
Vision for Economic Agenda and Future Growth
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.”
Diversification and Collaboration
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.”
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.”
