Dubai's economy grew 3.3% in first nine months of last year

Emirate's accommodation and food services industry led growth with more than 11 per cent annual increase

A view of Dubai Marina. Dubai's transportation and storage services sector surged by almost 11 per cent in the first nine months of last year. AFP

Dubai’s economy expanded by an annual 3.3 per cent in the first nine months of last year, driven by growth in the emirate's tourism and transportation sectors, the latest government data shows.

Dubai's accommodation and food services industry recorded 11.1 per cent growth, while the transportation and storage services sector surged by 10.9 per cent, the Dubai Media Office said on Sunday.

“This success is the result of the harmonious collaboration between all of Dubai’s economic stakeholders, including its public and private sectors,” said Sheikh Hamdan bin Mohammed, Crown Prince of Dubai.

“It is also a reflection of Dubai’s favourable economic climate, robust world-class infrastructure, pro-business regulations and deep talent pool which together consistently draw in a diverse array of investors and entrepreneurs from all corners of the globe.”

Dubai, one of the main commercial, tourism and financial hubs of the Middle East, has maintained growth momentum since bouncing back from the pandemic-driven slowdown.

Dubai's GDP expanded by 3.2 per cent annually in the first half of last year to Dh223.8 billion ($60.9 billion), driven by growth in sectors such as transport, trade, financial services, accommodation and food services, property, information and communication, and manufacturing. according to official data released in October.

The transport and storage sector, which includes land, sea and air transport and logistics, contributed 13.1 per cent to Dubai's GDP in the first nine months of 2023, injecting Dh42.9 billion into the emirate's economy.

The accommodation and food services sector accounted for 3.4 per cent of the emirate's economy, making a value addition of Dh11.1 billion, according to the Media Office statement.

“Our success is also a result of the continuous, collaborative efforts between the public and private sectors. Together, we are working within a unified framework to realise the objectives of the Dubai Economic Agenda D33," said Helal Al Marri, director general of Dubai’s Department of Economy and Tourism.

"Our focus is not only on maintaining the current momentum but also on further strengthening an environment that enables businesses to thrive," Mr Al Marri said.

Launched in January last year, D33 aims to double the size of Dubai’s economy, with a target of reaching Dh32 trillion by 2033 and establishing the emirate among the top three global cities.

The plan envisages a programme to support 30 private companies to achieve the so-called unicorn status ― company with valuation more than $1 billion. Other business incubators will support the growth of private companies, with 400 of the most promising identified.

The D33 agenda also aims to make Dubai a global digital economy leader, the fastest growing and most attractive global business centre, a centre for sustainability and economic diversification, and an incubator and enabler of talented citizens.

In the first nine months of last year, Dubai's information and communication technology industry grew 4.4 per cent annually to Dh15 billion.

The emirate's real estate sector recorded year-on-year growth of 4 per cent to Dh26.8 billion amid continued demand for both residential and investment opportunities, according to latest data.

Dubai's property has bounced back strongly from the coronavirus-induced slowdown, helped by government initiatives such as residency permits for retirees and remote workers.

The emirate's non-oil private sector grew robustly in December, with activity reaching its highest level in 16 months as new orders rose and cost pressures eased.

The seasonally adjusted S&P Global Dubai purchasing managers' index reading hit 57.7 last month, up from 56.8 in November and well above the neutral 50-point mark separating an expansion from a contraction.

The reading was the highest since August 2022 and the second highest in four-and-a-half years.

Emirates NBD expects Dubai's GDP to grow by 4 per cent this year, compared with a 3.3 per cent expansion in UAE's economy.

"The outlook over the coming months remains positive also, with new order growth at the highest level since mid-2019, boding well for the pipeline of activity through the start of 2024 at least," the Dubai lender said in a research note this month.

In October, the UAE Central Bank increased its 2024 growth forecast for the country's economy to 5.7 per cent, from 4.3 per cent previously, due to an expected rise in oil production.

However, it revised down its growth projections for 2023 to 3.1 per cent from 3.3 per cent, largely reflecting the extension of oil production cuts through the end of 2023, it said in its Quarterly Economic Review report.

"Dubai's economic performance is a clear reflection of the effective policies and initiatives that we have implemented as part of our long-term development roadmap," said Hadi Badri, chief executive of the Dubai Economic Development Corporation, Department of Economy and Tourism.

“We aim to solidify Dubai’s position as a top strategic priority for global business decision-makers in 2024," he added.