Dubai’s GDP grows 4.6%, testimony to its economic resilience: Sheikh Hamdan
12 December 2022, Khaleej Times
The Crown Prince acknowledged the role of different entities that contributed to the emirate’s growth, despite the global slowdown.
Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council, announced that Dubai’s GDP grew 4.6% year-on-year to Dh307.5 billion during the first nine months of 2022 compared with the same period last year.
The Crown Prince noted that Dubai’s exceptional GDP growth was the result of the efforts of various government and private entities to achieve the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, to make Dubai’s economy a global benchmark in sustainability and resilience.
He added that Dubai’s responsive and efficient economic framework, along with its ability to track and anticipate demand trends in both the short and long terms, ensure that it can swiftly leverage opportunities and continue its ambitious journey to excellence.
Sheikh Hamdan said: “Dubai’s economy is founded on strong principles of income diversification by developing strategic sectors, promoting future-focused economic activities, implementing prudent fiscal policies, and constantly upgrading regulatory and legal frameworks to encourage investment and support business. Our strong partnership with the private sector, both locally and internationally, is a key enabler for sustaining our growth with a clear vision to maintain Dubai’s position at the forefront of various international competitiveness indicators.”
The Dubai Crown Prince expressed his appreciation to all those who contributed to this exceptional growth despite the global economic slowdown and an uncertain financial environment worldwide. HH said the performance was a testimony to Dubai’s prudent plans, sustainable policies, and strategic public-private partnerships. Sheikh Hamdan called upon all sectors to continue innovating and pivoting to maintain Dubai’s leading position as a resilient and dynamic economy.
According to the latest economic report by the Dubai Digital Authority’s Dubai Statistics Centre, ‘Wholesale and Retail Trade’ accounted for 24.1% of Dubai’s GDP during the January-September period this year, maintaining its position as the top contributor to the emirate’s economy. In terms of growth, the hospitality and F&B services outperformed all other sectors, with a year-on-year increase of 28% during the year’s first nine months.
Among notable sectoral performances is the remarkable growth in ‘Transport and Storage,’ accounting for 2.5 percentage points or more than half of the 4.6 percentage-point growth in Dubai’s GDP in the first nine months of 2022. The fact that the sector’s contribution to the overall GDP stood at just 11.6% during the period underscores the dynamism of Dubai’s economy, highlighting how different activities and sectors integrate to lend robustness and strength to the emirate’s economy.
Hamad Obaid Al Mansoori, Director General of Digital Dubai Authority, said: “These figures emphasise the solid foundations of Dubai’s economy, reinforced by the government’s successful economic policies and programmes. Dubai presents a resilient economic model supported by rational leadership, a strong economic framework, dynamic workflow, robust infrastructure, and world-class quality of service. Despite the global uncertainty, Dubai and the UAE are confidently moving towards a future shaped by the vision of its leadership, the intellect of its citizens and the dedication of its employees.”
Helal Saeed Al Marri, Director General of Dubai’s Department of Economy and Tourism, said: “These positive economic indicators validate both the strength of Dubai’s business ecosystem to achieve robust and sustainable growth, and the government’s business-enabling policies, attractive fiscal measures, and investor-centric approach in delivering this.
“Under Dubai’s decisive leadership, we will continue to intensify our efforts, consolidate public-private partnerships, and enhance Dubai’s status as a magnet for global investment and talent. We strive to further improve the competitiveness of our economic and tourism pillars and related sectors, such as trade, retail, restaurants, and hotels – all of which have witnessed high growth.”
1.6% growth in trade activity
The Wholesale and Retail Trade sector reached a value of AED74 billion during the first nine months of 2022, growing by 1.6% compared with the same period in 2021. The activity accounted for 24.1% of Dubai’s nine-month GDP and contributed 9% (more than 0.4 percentage points) to the emirate’s GDP growth. Dubai’s vibrant retail sector is the world’s top market for international brands. It is also a thriving hub for international trade and re-export, connecting the East with the West for foodstuff, commodities, and consumer and capital goods, among others.
26.3% growth in transport & storage activity
The Transport and Storage sector reached a value of AED35.8 billion during the first nine months of 2022, growing by a remarkable 26.3% compared with the same period in 2021. The activity, which accounted for an impressive 2.5 percentage point growth in the emirate’s GDP during the period, includes transportation of passengers and cargo by rail, road, water or air. It includes associated activities such as terminal and parking facilities, cargo handling, storage facilities, etc.
Within the sector, air transport contributed the lion’s share to its value and growth due to a significant increase in demand for air services. Dubai’s airlines witnessed a 151% increase in the number of passengers they flew during the first nine months of this year compared with the same period last year, thanks to the easing of travel restrictions in most countries worldwide.
28% growth in accommodation & food services activity
In terms of growth in the first nine months of 2022, hospitality and F&B outperformed all other economic activities. The Accommodation and Food Services activity reached a value of AED15.8 billion during the first nine months of 2022, growing by an exceptional 28% compared with the same period in 2021. The sector accounted for a 5.1% share of Dubai’s GDP and a 26% share (1.2 percentage points) of GDP growth during the nine months.
The latest data from the Department of Economy and Tourism shows that Dubai hosted 10.12 million international visitors from January to September 2022 compared with 3.85 million visitors during the same period of last year, a remarkable growth of 163% y-o-y. The exceptional performance and a robust recovery in tourism can be credited to the efforts of relevant authorities and government entities that organised and implemented a packed and vibrant calendar of events and activities to attract visitors.
2.5% growth in real estate activity
Dubai’s real estate activity grew by 2.5% y-o-y during the first nine months of 2022, accounting for a 9.1% share of the emirate’s GDP and contributing 5% (0.23 percentage points) to the overall GDP growth. The growth results from a 76% year-on-year increase in real estate sales during the first nine months of the year, according to Dubai Land Department (DLD) data. The sector benefitted from the Dubai government’s economic stimulus packages and enhanced transparency, boosting investor confidence.
1.2% growth of the financial sector
Financial and insurance activities reached a value of AED32.8 billion during the first nine months of 2022, growing by 1.2% compared to 2021. The sector accounted for a 10.7% share of Dubai’s GDP and a 3% share (0.14 percentage points) of GDP growth during the nine months.
UAE Central Bank data shows a year-on-year increase of 1.4% in loans and a 4.9% rise in deposits compared with the same period last year. The sector benefitted from a 1.1% decrease in interest rates on loans and a 15% decrease in interest rates on deposits during the nine-month period, which boosted the banking sector’s bottom line.