Business activity in Dubai’s non-oil private sector economy continued to improve in July, recording the fastest output growth in three years amid a sharp increase in new orders.
The emirate's headline, seasonally adjusted S&P Global purchasing managers’ index rose to 56.4 in July, from 56.1 in June, its best performance since June 2019.
A reading above the neutral 50 level indicates economic expansion while one below points to a contraction.
“Dubai’s non-oil private sector registered the fastest rise in output in three years in July, supported by another solid increase in new business and promotional activity,” said David Owen, an economist at S&P Global Market Intelligence.
Dubai’s economy, which made a strong rebound the coronavirus-induced slowdown last year, has carried the growth momentum into this year, supported by the resurgent travel and tourism sector and its rapidly improving property market.
The emirate’s economy grew 6.2 per cent in 2021, according to preliminary data from the Dubai Statistics Centre. In the first three months of this year, Dubai’s gross domestic product expanded 5.9 per cent, according to government data.
The UAE’s property sector continues to recover from the impact of the coronavirus pandemic on the back of government initiatives such as residency permits for retirees and remote workers, as well as the expansion of the 10-year golden visa programme and the economic boost generated by Expo 2020 Dubai.
The value of property deals in Dubai more than doubled last year to break a 12-year record in terms of sales transactions, buoyed by demand in the secondary real estate market, according to listings portal Property Finder.
Although the volume of new business eased from June’s near-three year high, it was still sharp overall, the S&P Global report said.
Marketing activity, including promotions and discounting by businesses, drove up sales last month.
Output last month rose for the 20th month in a row. Companies reported a marked rise in tourism-related business activity in Dubai, the Middle East’s commercial and tourism centre, as travel restrictions continued to ease around the world.
Dubai hosted 7.12 million international visitors in the first half of 2022, about three times the 2.52 million tourists recorded in the same period last year, the emirate’s Department of Economy and Tourism (DET) said on Monday.
The number brings the emirate closer to its pre-Covid-19 pandemic levels of 8.36 million arrivals in the first six months of 2019, the DET said.
Dubai’s labour market also continued to improve in July, with employment rising for the third successive month.
The travel and tourism sector recorded the sharpest increase in employment in July, the report said.
Inflation has been rising in the UAE, in line with the global trend. The consumer price index increased by 3.4 per cent during the first quarter of 2022, compared with 0.6 per cent and 2.3 per cent in the third and fourth quarters of 2021, respectively, according to the UAE Central Bank.
Inflation is projected to reach 5.6 per cent in 2022, the Central Bank said.
There was an easing of cost inflationary pressures for Dubai’s non-oil private sector after June had registered the fastest rise in input prices since January 2018, the S&P Global report said.
Although input cost inflation broke a four-month sequence of accelerating price increases, cost pressures were at their second highest in four and a half years.
“Input price inflation remained among the fastest on record, despite slowing from June’s 53-month high. Fuel prices again impacted firms’ costs, notably in the travel and tourism sector where input prices rose the most since this index began in 2015,” Mr Owen said.
The travel and tourism sector recorded the fastest rate of input price inflation, according to the report.
“There was also evidence of rising pressure on firms’ selling prices,” Mr Owen said.
“Although overall charges levied for goods and services were broadly unchanged since June, this ended a 12-month sequence of discounting.”
With new order growth picking up pace, businesses said they were confident about output growth over the coming year.
Winners
Ballon d’Or (Men’s)
Ousmane Dembélé (Paris Saint-Germain / France)
Ballon d’Or Féminin (Women’s)
Aitana Bonmatí (Barcelona / Spain)
Kopa Trophy (Best player under 21 – Men’s)
Lamine Yamal (Barcelona / Spain)
Best Young Women’s Player
Vicky López (Barcelona / Spain)
Yashin Trophy (Best Goalkeeper – Men’s)
Gianluigi Donnarumma (Paris Saint-Germain and Manchester City / Italy)
Best Women’s Goalkeeper
Hannah Hampton (England / Aston Villa and Chelsea)
Men’s Coach of the Year
Luis Enrique (Paris Saint-Germain)
Women’s Coach of the Year
Sarina Wiegman (England)
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
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Farasan Boat: 128km Away from Anchorage
Director: Mowaffaq Alobaid
Stars: Abdulaziz Almadhi, Mohammed Al Akkasi, Ali Al Suhaibani
Rating: 4/5
Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
57%20Seconds
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Our legal advisor
Ahmad El Sayed is Senior Associate at Charles Russell Speechlys, a law firm headquartered in London with offices in the UK, Europe, the Middle East and Hong Kong.
Experience: Commercial litigator who has assisted clients with overseas judgments before UAE courts. His specialties are cases related to banking, real estate, shareholder disputes, company liquidations and criminal matters as well as employment related litigation.
Education: Sagesse University, Beirut, Lebanon, in 2005.
Various Artists
Habibi Funk: An Eclectic Selection Of Music From The Arab World (Habibi Funk)
Gulf Under 19s final
Dubai College A 50-12 Dubai College B
European arms
Known EU weapons transfers to Ukraine since the war began: Germany 1,000 anti-tank weapons and 500 Stinger surface-to-air missiles. Luxembourg 100 NLAW anti-tank weapons, jeeps and 15 military tents as well as air transport capacity. Belgium 2,000 machine guns, 3,800 tons of fuel. Netherlands 200 Stinger missiles. Poland 100 mortars, 8 drones, Javelin anti-tank weapons, Grot assault rifles, munitions. Slovakia 12,000 pieces of artillery ammunition, 10 million litres of fuel, 2.4 million litres of aviation fuel and 2 Bozena de-mining systems. Estonia Javelin anti-tank weapons. Latvia Stinger surface to air missiles. Czech Republic machine guns, assault rifles, other light weapons and ammunition worth $8.57 million.
The view from The National
The biog
DOB: March 13, 1987
Place of birth: Jeddah, Saudi Arabia but lived in Virginia in the US and raised in Lebanon
School: ACS in Lebanon
University: BSA in Graphic Design at the American University of Beirut
MSA in Design Entrepreneurship at the School of Visual Arts in New York City
Nationality: Lebanese
Status: Single
Favourite thing to do: I really enjoy cycling, I was a participant in Cycling for Gaza for the second time this year
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
