Key takeaways:
- Propelled by an impressive 3.6% growth in Q2 2023, the Dubai economy grows to reach a total value of AED223.8 billion in H1 2023.
- Services sector performance indicators confirm that Dubai is the fastest-recovering destination in the world.
- Transportation and storage sector leads with 10.5% growth in the first half of 2023.
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% of H1 growth, with the transportation and storage sector leading with 42.8%, followed by trade at 12.9%, and the financial and insurance activities sector at 9.9%, 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% growth in real GDP in Q2 2023.
1.7% growth in trade activity
Trade activities achieved an added value of AED53.6 billion in H1 2023, growing by 1.7% compared to the same period in 2022, and contributing 23.9% of the GDP and 12.9% 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.
10.5% growth in the transportation and logistics sector
Transportation and logistics outperformed all other sectors with a significant growth of 10.5% in H1 2023, compared to the same period last year. The sector contributed 42.8% to the overall recorded first half growth, generating AED31.4 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% growth in passenger numbers in the first half of 2023, compared to the same period last year.
9.2% growth in hotels and restaurants sector
The hotel and food services sector reported a 9.2% growth rate in the first half of 2023, with an added value of about AED7.9 billion. The sector contributed 3.5% to the economy and 9.5% to overall growth The emirate welcomed 8.55 million international visitors with 20% 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 favorite tourist destination. The data issued by the DET underlines the emirate’s status as the fastest recovering destination in the world.
3.6% growth in real estate activity
A report published by Digital Dubai’s Dubai Data and Statistics Establishment showed that real estate activity grew by 3.6%, contributing by 8.2% to the overall economy and 9.2% 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.
2.7% growth of the financial sector
Financial and insurance activities achieved a growth of 2.7% during the first half of 2023, contributing 11.9% to the GDP, with an added value of AED26.6 billion, in addition to contributing 9.9% to the total growth. UAE Central Bank data indicate that the volume of credit and deposits grew by an average of 9% compared to the same period of the previous year.
3.8% growth of the information and communications sector
Information and communications activity recorded a 3.8% growth in the first half of 2023, compared to the same period in 2022, achieving an added value of AED9.6 billion and contributing 5% of the total growth.
Meanwhile, other economic sectors achieved growth of 0.7% during the first half of 2023, and together contributed a combined 6.1% of the total growth.
His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council of Dubai, hailed the strong performance of the emirate’s economy in the first half of 2023. This 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. Dubai’s rapid economic growth is a natural outcome of Mohammed bin Rashid’s forward-looking vision to invest in people and create the conditions to ensure the continuous development of Dubai’s investment environment.
His Excellency 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 His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.
His Excellency Hamad Obaid Al Mansoori, Director General of Digital Dubai, commented on the results, stating that “ Dubai’s economy is supported by numerous success factors, including the legislative system, infrastructure, quality of services, attractiveness to investment, and digital transformation – all guided by the grand vision of the leadership.