Dubai Q1 GDP Growth Beats Global Averages: Results By Industry Sectors

Dubai’s Real Gross Domestic Product (GDP) grew 2.8% year-on-year in the first quarter of the year to reach Dhs111.3 billion (US$30.3 billion) surpassing the average global growth rates for Q1 2023. The surge maintains the robust momentum of growth achieved in 2022, when the emirate experienced a 4.4% expansion of the economy.

Dubai’s growth in Q1 2023 is significantly higher than that of some of the most developed countries in the world. Data issued by the Organisation for Economic Cooperation and Development (OECD) indicate a seasonally adjusted growth of 1.6% for OECD countries. The European Union grew by 1.1%, while the US economy grew by 1.8% in the first quarter of the year.

Transport and storage, the financial and insurance sector, and trade all showed significant growth, according to data issued by the Dubai Data and Statistics Establishment of the Dubai Digital Authority.

Dubai High Growth Sectors

Transport & Storage

The transportation and storage sector was the biggest contributor to overall growth at 48% of the total, and a significant overall growth of 10.3% in Q1 2023, compared to the same period last year. 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 accounted for the largest proportion of the transport and storage sector given its sizeable production volume. The sub-sector’s performance was positively impacted by the increase in the demand for the services of national carriers, which recorded 68% growth in passenger numbers in Q1 2023, compared to the same period last year.

Wholesale & Retail

The report revealed that wholesale and retail trade continued to be the largest contributor to the economy, accounting for 22.9% of the GDP, followed by the transportation sector, which accounted for 14.1%. These results highlight the dynamic, diversified structure of Dubai’s economy, in which the interdependence and inter-connectedness of various sectors create synergistic growth.

Trade

The trade sector recorded a 1.2% growth in the first quarter of 2023, compared to the same period in 2022, bringing an added value of AED25.5 billion. The sector accounted for 22.9% of the economy and contributed 10% of overall recorded Q1 2023 growth. It encompasses a wide range of companies dealing in various consumer and capital goods. Trade, which has a notable impact on various other activities, includes some of the largest companies in the country and the region, whose commercial activities cover a wide range of consumer and capital goods.

Accommodation and Catering Services  

The accommodation and food services sector reported a 5.6% growth rate in the first quarter of 2023, with an added value of approximately AED4.5 billion. The sector contributed 4.1% to the economy and 8% to overall recorded growth in Q1. The emirate welcomed 4.67 million international visitors, a 18% increase from the 3.97 million welcomed during the same period in 2022, according to figures from Dubai’s Department of Economy and Tourism. These results were made possible by the efforts of various initiatives of stakeholders to attract visitors, including international conferences and exhibitions throughout the year.

Real Estate

The Dubai Data and Statistics Establishment report revealed that real estate activities grew by 2.4%, contributing 7.4% to the economy and 6% to the overall recorded growth, driven by the growth in real estate margins on property sales, which grew significantly in Q1 2023, according to Dubai Land Department figures.

Financial Sectors

Dubai’s financial and insurance activities recorded a growth of 3.2% in the first quarter of 2023, contributing 12.7% to the GDP and AED14.2 billion in added value. The sector accounted for 15% of Dubai’s overall Q1 growth. Data from the UAE Central Bank indicated a 3.5% growth in credit balances and a 14.9% growth in deposit balances compared to the same period last year.

Other Economic Sectors

Meanwhile, other economic sectors experienced an average growth rate of 1.5% in the first quarter of 2023, contributing a combined 35.5% to the overall economy

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