Dubai's economy grew by 4 per cent annually in the first quarter of 2025, backed by expansion across several key sectors.
The emirate's gross domestic product rose to Dh119.7 billion ($32.6 billion) in the three months that ended in March, Dubai Media Office said on Thursday.
The growth was driven by “strong performances” in key sectors, with human health and social work posting the highest year-on-year growth rate at 26 per cent to hit Dh1.9 billion, it said.
In terms of value, the wholesale and retail trade sector was the biggest at Dh27.5 billion, up 4.5 per cent year-on-year and contributing nearly a quarter to Dubai's economy in the first three months.
Activity in real estate, one of Dubai's most important sectors, rose 7.8 per cent to about Dh9 billion.
The volume and value of real estate transactions in Dubai rose sharply in the first half of the year amid the entry of more than 59,000 new investors into the booming market, Dubai Media Office said last month, quoting Dubai Land Department data.
The number of transactions reached 125,538, up nearly 26 per cent from 99,947 during the first six months of last year. The value of these transactions rose about 25 per cent to about Dh431 billion, “highlighting the strong growth momentum in the market”, the report said.
In the first quarter, financial and insurance, another key industry in Dubai, grew 5.9 per cent to Dh16 billion. Manufacturing grew 3.3 per cent to Dh8.7 billion.
Accommodation and food services posted a 3.4 per cent increase to reach Dh4.9 billion, the report found.
Dubai received 9.88 million international visitors in the first six months of 2025, Crown Prince Sheikh Hamdan bin Mohammed said this month.
Dubai's Department of Economy and Tourism said the latest figure represents a 6 per cent year-on-year increase. The data highlights Dubai's continuing growth as a global tourism hub, after the city welcomed a record 18.72 million international visitors last year.
Meanwhile, transport and storage added 2 per cent to Dubai's GDP in the second quarter, at Dh15.7 billion. Information and telecoms rose 3.2 per cent to Dh5.3 billion.
Overall, the trade, real estate, financial services, transport and industry sectors collectively contributed about 78 per cent of Dubai's total growth, the media office said.
“At a time when businesses, investors and entrepreneurs are seeking stability and certainty, Dubai’s sustained and diversified economic growth continues to underscore its global appeal,” said Hadi Badri, chief executive of Dubai Economic Development Corporation.
The emirate remains focused on boosting domestic and international partnerships through strategic initiatives to unlock "new opportunities, enabling innovation, and turning ideas and plans into scaleable, commercial successes", he added.
Dubai's economy has been expanding on the back of several government initiatives aimed at encouraging entrepreneurship and attracting international investments
The emirate is currently working towards its Dubai Economic Agenda, or D33, which aims to double the size of its economy to Dh32 trillion over the next decade and establish the emirate among the top three global cities.
The wider UAE has also undergone robust growth in its economy, which expanded by 4 per cent in 2024 to hit Dh1.776 trillion, driven by its non-oil sector as the country continues to diversify, official data showed in June.
The World Bank in June upgraded its economic growth forecast for the UAE to 4.6 per cent this year, up from its 4 per cent projection in January.
Emirates NBD, Dubai's biggest bank by assets, expects the emirate's economy accelerate to 3.7 per cent this year on the back of substantial project spending from both the private and public sectors.
The UAE has also been ranked as the world's second most preferred destination for foreign direct investments.
The Emirates, which received Dh167 billion in FDI last year, aims to increase that figure to Dh1.3 trillion by 2031.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
What is the definition of an SME?
SMEs in the UAE are defined by the number of employees, annual turnover and sector. For example, a “small company” in the services industry has six to 50 employees with a turnover of more than Dh2 million up to Dh20m, while in the manufacturing industry the requirements are 10 to 100 employees with a turnover of more than Dh3m up to Dh50m, according to Dubai SME, an agency of the Department of Economic Development.
A “medium-sized company” can either have staff of 51 to 200 employees or 101 to 250 employees, and a turnover less than or equal to Dh200m or Dh250m, again depending on whether the business is in the trading, manufacturing or services sectors.
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Evacuations to France hit by controversy
- Over 500 Gazans have been evacuated to France since November 2023
- Evacuations were paused after a student already in France posted anti-Semitic content and was subsequently expelled to Qatar
- The Foreign Ministry launched a review to determine how authorities failed to detect the posts before her entry
- Artists and researchers fall under a programme called Pause that began in 2017
- It has benefited more than 700 people from 44 countries, including Syria, Turkey, Iran, and Sudan
- Since the start of the Gaza war, it has also included 45 Gazan beneficiaries
- Unlike students, they are allowed to bring their families to France
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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
