Dubai economy grows 3.2% in first half of 2023

His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai Executive Council, has hailed the strong performance of the Emirate's economy in the first half of 2023.

With a growth of 3.2 per cent in the first half of 2023, compared to the same period last year, the economy’s total value has reached AED 223.8 billion.

It 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 per cent of H1 growth, with the transportation and storage sector leading with 42.8 per cent, followed by trade at 12.9 per cent, and the financial and insurance activities sector at 9.9 per cent, according to figures released by the Dubai Data and Statistics Establishment.

The exceptional performance was driven by a 3.6 per cent growth in real GDP in second quarter of 2023.

“The economic expansion is consistent with the goals of the Dubai Economic Agenda D33 and consolidate the Emirate’s position as one of the world’s top three urban economies,” Sheikh Hamdan said, adding that it reflects the vision of Dubai Ruler His Highness Sheikh Mohammed bin Rashid Al Maktoum.

Trade activities achieved an added value of AED 53.6 billion in H1 2023, growing by 1.7 per cent compared to the same period in 2022, and contributing 23.9 per cent of the GDP and 12.9 percent 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.

Transportation and logistics outperformed all other sectors with a significant growth of 10.5 per cent in H1 2023, compared to the same period last year. The sector contributed 42.8 per cent to the overall recorded first-half growth, generating AED 31.4 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 per cent growth in passenger numbers in the first half of 2023, compared to the same period last year.

The hotel and food services sector reported a 9.2 per cent growth rate in the first half of 2023, with an added value of about AED7.9 billion. The sector contributed 3.5 per cent to the economy and 9.5 per cent to overall growth The emirate welcomed 8.55 million international visitors with 20 per cent 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 favourite tourist destination. 

A report published by Digital Dubai’s Dubai Data and Statistics Establishment showed that real estate activity grew by 3.6 per cent, contributing 8.2 per cent to the overall economy and 9.2 per cent 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.

Financial and insurance activities achieved a growth of 2.7 per cent during the first half of 2023, contributing 11.9 per cent to the GDP, with an added value of AED 26.6 billion, in addition to contributing 9.9 per cent to the total growth. UAE Central Bank data indicate that the volume of credit and deposits grew by an average of 9 percent compared to the same period of the previous year.

Information and communications activity recorded a 3.8 per cent growth in the first half of 2023, compared to the same period in 2022, achieving an added value of AED 9.6 billion and contributing 5 per cent of the total growth.

Meanwhile, other economic sectors achieved growth of 0.7 per cent during the first half of 2023, and together contributed a combined 6.1 per cent of the total growth.