Dubai economy grows more than 4% to $84bn in nine months

Various entities contributed to make the emirate a 'global leader across all sectors', Crown Prince says

The Downtown Dubai skyline. The emirate's economy has made a strong recovery from the Covid-induced slowdown. Reuters
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Dubai’s economy expanded by 4.6 per cent on annual basis in the first nine months of this year to about Dh307.5 billion ($84 billion), driven by the emirate’s efforts to solidify its position as a business, financial and tourism centre, said Sheikh Hamdan bin Mohammed, Crown Prince of Dubai.

“This exceptional performance is the result of the collective efforts of various entities to make Dubai a global leader across all sectors,” Sheikh Hamdan said in a tweet on Monday.

The emirate’s responsive and efficient economic framework, along with its ability to “track and anticipate demand trends in both the short and long terms” ensured that it made swift use of opportunities, he was quoted by the Dubai Media Office as saying.

“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,” Sheikh Hamdan said.

“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.”

Sheikh Hamdan praised the role of different entities that contributed to the emirate’s economic growth, despite the global slowdown and an uncertain financial environment worldwide.

Dubai's performance was a testimony to “prudent plans, sustainable policies and strategic public-private partnerships”, Sheikh Hamdan said.

Dubai economy bounced back from the coronavirus-driven slowdown last year, picking up further growth momentum this year.

Government measures to minimise the impact of the Covid-19 pandemic and Expo 2020 Dubai also spurred growth this year.

Last week, Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, approved the emirate's budget for 2023 to 2025, allocating Dh205 billion of expenditure.

The emirate earmarked Dh67.5 billion for spending next year as it continues to drive momentum, expand its economic base and meet the goals of Dubai Strategic Plan 2030.

Dubai expects to achieve Dh69 billion in public revenue next year, about 20 per cent up from the budget for this fiscal year.

Oil revenue represents only about 5 per cent of the total expected next year, underlining the financial sustainability and diversification of the emirate.

“This budget reflects Dubai’s commitment to meet the city’s future aspirations locally and globally,” Sheikh Hamdan said on Twitter at the time.

“Dubai's 2023 budget proposes expenditures of Dh67.5 billion and revenues of Dh69 billion. Dubai government aims to serve citizens, support businesses and ensure availability of best services for everyone.”

The emirate's economy grew 6.2 per cent in 2021 and expanded 5.9 per cent in the first three months of this year as its tourism and retail sectors reported a sharp Expo-driven boost, according to government data.

The wholesale and retail trade during the first nine months of this year accounted for 24.1 per cent of Dubai’s GDP, maintaining its position as the top contributor to the emirate’s economy, according to the latest data from the Dubai Statistics Centre.

The value of wholesale and retail trade reached Dh74 billion during the reporting period, growing 1.6 per cent on an annual basis.

In terms of growth, the hospitality and food and beverage segments outperformed all other sectors, with an annual increase of 28 per cent from January to September.

The value of economic activity in the sector hit Dh15.8 billion during the first nine months of 2022, growing by 28 per cent compared with the same period in 2021.

The sector accounted for a 5.1 per cent share of Dubai’s GDP and a 26 per cent share, or 1.2 percentage points, of GDP growth during the period, according to government data.

Dubai hosted 10.12 million international visitors from January to September, compared with 3.85 million visitors during the same period of last year, an annual growth of 163 per cent, the media office said, citing Department of Economy and Tourism data.

The transport and storage sector accounted 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 report said.

Dubai's business environment has also improved steadily, with business activity in the non-oil private economy expanding at a robust pace, driven by a boost in new orders in November.

The emirate's headline seasonally adjusted S&P Global purchasing managers' index reading stood at 56, above the neutral 50 mark separating expansion from contraction.

Companies in the emirate increased their headcounts at the fastest pace in about three years.

The property sector, a key constituent of the emirate’s economy has also made a strong recovery from the slowdown, despite global economic headwinds.

Dubai’s real estate activity grew by 2.5 per cent on an annual basis during the first nine months of 2022, accounting for a 9.1 per cent share of the emirate’s GDP, according to the latest government data.

The growth was spurred by a 76 per cent annual increase in property sales during the nine-month period, according to Dubai Land Department data.

Dubai's property sales transactions reached their highest for the month of November since 2011 amid a continued upswing in the market this year, according to Property Finder.

A total of 10,941 transactions took place, up 58.5 per cent annually during the period. The value of property deals also surged by about 71 per cent on an annual basis to Dh30.5 billion, according to the report.

Updated: December 12, 2022, 1:03 PM