Dubai's GDP tops Dhs 115 billion in first quarter of 2024, says Sheikh Hamdan

Gulf Today, Staff Reporter

His Highness Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum, Crown Prince of Dubai, Deputy Prime Minister and Minister of Defence of the UAE, and Chairman of The Executive Council of Dubai, reiterated that the emirate’s economy continues to grow steadily and showcase robust economic indicators that exemplify the vision and directives of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.

The strength of Dubai’s economy is amply demonstrated in the 3.2% economic growth it achieved in the first quarter of 2024 compared to the same period last year, by adding more than Dhs 115 billion in GDP terms, Sheikh Hamdan said.

Sheikh Hamdan said it is especially commendable that the emirate’s successes in this regard highlight the combined efforts and teamwork of various stakeholders to realise the objectives of the emirate’s comprehensive development plans for 2033, specially the Dubai economic Agenda (D33) and Dubai Social Agenda 2033, which serve to enhance overall standards of wellbeing and quality of life while consolidating Dubai’s standing as a global economic capital and its attractiveness as a destination for foreign investments.

Sheikh Hamdan said: “Dubai is progressing in accordance with a clear vision whose foundations were laid down and whose goals were defined by Sheikh Mohammed. What we witness today is a practical reflection of this vision, which has placed Dubai among the leading economic and commercial centres of the world.”

Sheikh Hamdan added: “Dubai’s ambition is limitless, and its success story will remain a role model for cities wishing to create a promising future for their coming generations. Our goal is to sustain success and establish a culture of excellence and leadership across all sectors in the emirate to preserve these gains and move towards new horizons of excellence.”

The growth in Dubai’s GDP is the result of growth achieved in various vital sectors that constitute the basic pillars of the economic system in the emirate. The transportation and storage sector, and the financial and insurance activities sector achieved identical growth rates of 5.6%, the trade sector logged a growth of 3%, the information and communications sector posted a growth of 3.9%, the  accommodation and food services activities sector grew 3.8%, and the real estate sector achieved a growth of 3.7%.

The economic growth in the first quarter of the year mirrors the success story of 2023, when the GDP reached approximately AED 429 billion, marking an increase of 3.3% compared to the 2022 figure of approximately Dhs 415 billion.

Outstanding display

Helal Saeed Almarri, Director General, Dubai Department of Economy and Tourism, (DET) said: “Dubai’s impressive quarterly growth performance underscores the sustained momentum and confidence within its dynamic business ecosystem, reflecting the robust diversification of our economic foundations.

We remain committed to advancing the comprehensive economic framework set forth in Dubai’s Economic Agenda 2033, continuously refining and leveraging various economic instruments to enhance competitiveness, attract substantial investment, and facilitate seamless business operations.”

He added: “This achievement is a testament to the clear, stable, and forward-thinking leadership of Sheikh Mohammed, and with high-impact initiatives such as the Foreign Direct Investment Development Program to attract selective investments aligned with the D33 Agenda and the implementation of the Dubai Economic Model to monitor the city’s advancement, we are poised to further energise our growth initiatives.

These measures will enhance collaboration between public and private sector stakeholders, propelling Dubai towards its goal of achieving top global status for economic growth and becoming a prime destination for business, talent, and investment.”

An upward trajectory

In this context, Hamad Obaid Al Mansoori, Director General of Digital Dubai, said: “The upward trajectory of economic growth indicators across various sectors shows that Dubai, under its wise leadership, is confidently moving towards enhancing its economic leadership and investment attractiveness.

This progress is supported by economic diversification and the adoption of the latest technologies and solutions, including digital transformation, which has made the emirate a destination for entrepreneurs and those interested in creating successful experiences.

Dubai’s economy has always drawn its strength from flexibility, keeping pace with changes, and proactive thinking that anticipates major economic transformations in the world, most notably the digital economy supported by artificial intelligence and data.”

Data to support decisions

Younus Al Nasser, Chief Executive of the Dubai Data and Statistics Establishment, emphasised the importance of providing accurate data on various economic sectors and their total contribution to the emirate's growth.

This data supports the leadership’s decision-making process and the development of relevant strategies and policies that contribute to achieving the city’s goals in all fields, he said.

“The recent data showing Dubai’s economy has grown by 3.2% compared to the same period last year gives us an indication about the future of the emirate’s economy. Dubai has always positioned itself as a leading example in attracting investments mainly in emerging technologies, which represents the backbone that supports the development of all sectors,” he added.

Collaborative efforts

Hadi Badri, CEO of Dubai Economic Development Corporation, Dubai Department of Economy and Tourism said: “Dubai’s visionary leadership, combined with synergies between public and private sector partners, has once again proven critical to a strong economic performance in both traditional and emerging sectors, cementing the city’s position as a global hub for business and investment.

Collaborative efforts are among the key drivers of a healthy economic performance, propelling sectors that have been core to Dubai’s growth story – including logistics, trade, real estate, and financial services – to new heights, while also sustaining the upwards trajectories of increasingly important sectors such as manufacturing, information and communications, and hospitality and food services.

“Looking to the future, Dubai remains steadfast in its commitment to encouraging and harnessing innovation to accelerate the implementation of strategic economic initiatives, including streamlining the pathways for businesses and investors, creating new job opportunities, and attracting global talent to the city. All of these efforts are in line with the ambitious D33 Agenda, a comprehensive plan that aims to promote sustainable and inclusive growth across all of Dubai's key industries.”

Transportation and storage

The growth recorded by the transportation and storage sector amounted to Dhs 15.4 billion during the first quarter of the year, achieving a growth of 5.6% compared to the first quarter of last year. This sector contributed 13.4% to the emirate's GDP, significantly enhancing its impact on overall economic growth.

The growth achieved during the first quarter contributed 0.7 percentage points, which accounts for 23.2% of the total growth in the emirate's economy. The sector encompasses all activities pertaining to land, water or air transport involving individuals, goods, handling and storage activities, and postal services.

Air transport is the most significant activity within this sector. Its performance was bolstered by increased demand for national carriers' services, highlighted by a 6.8% increase in the number of passengers through the first quarter.

Financial and insurance activities

The financial sector achieved a real growth of 5.6% compared to the same period in 2023, reaching Dhs 15.1 billion compared to Dhs 14.3 billion in the first quarter of last year. This sector contributed 13.1% to the emirate’s total economy, driving economic growth by 0.7 percentage points. According to Central Bank of the UAE data at the end of the first quarter of 2024, there was an 8% growth in credit balances and a 15.2% growth in deposit balances compared to the same period in 2023.

Wholesale and retail trade

Data indicates that this sector maintained its lead in terms of contribution to the total GDP at 22.9% with a value of Dhs 26.3 billion, compared to Dhs 25.5 billion during the same period in 2023, achieving a growth rate of 3%.

This increase pushed up the total growth in the emirate's economy by 0.7 percentage points. The wholesale and retail trade activity supports all other sectors of the economy by ensuring availability of goods that serve diverse purposes, whether for inputs or intermediate consumptions, final consumption, , or capital formation

Real estate activities sector

This sector is witnessing significant movement driven by high demand and launch of notable real estate projects across the emirate. The sector achieved a growth rate of 3.7% during the first quarter of 2024, contributing 7.3% to the emirate's GDP with a total value of Dhs 8.4 billion, driving economic growth by 0.3 percentage points. Real estate activity maintained its upward trajectory in value-added growth during the first quarter. According to data issued by the Dubai Land Department, the value of real estate sales surged by 22%.

Utilities and waste management

The electricity, gas, water, and waste management activities sector added value amounting to Dhs 3.2 billion during the first quarter, compared to Dhs 2.98 billion during the same period last year, achieving a growth of 7.5%. This sector contributed 2.8% to the emirate’s overall economy, driving growth by 0.2 percentage points.

Information and communications sector

This sector grew by 3.9% to reach a value of Dhs 5.1 billion, driving economic growth by 0.2 percentage points. It contributed 4.4% to the emirate’s GDP.

Accommodation and food services activities

This sector posted a growth of 3.8%, with a value of Dhs 4.7 billion. Its contribution to the GDP reached 4.1%, driving economic growth by 0.2 percentage points.

According to data from the Department of Economy and Tourism, Dubai’s hotels maintained high occupancy levels, with an average hotel occupancy rate of 83%. Dubai welcomed 5.2 million international visitors during the first quarter of 2024, an increase of 11% compared to the same period in 2023.

Manufacturing

The manufacturing sector registered growth of 1.6%, accounting for Dhs 8.4 billion in total value during the first quarter, compared to Dhs 8.3 billion during the first quarter of last year. Its contribution to the emirate's GDP amounted to 7.3%, boosting economic growth by 0.1 percentage points during the first quarter.

Other activities

Other significant economic activities viewed collectively witnessed a growth of 0.46%, contributing 24.7% to the GDP and boosting economic growth by 0.12 percentage points. These activities include agriculture, mining, construction, professional services and administrative services, among others.

Economic figures from 2023

In 2023, the overall economy grew by 3.3%, with transportation, trade, real estate, and financial activities accounting for approximately 68.8% of the total growth achieved through the year. The remaining activities contributed 31.2%.

Transportation and storage

This sector witnessed a growth of 9.2% in 2023, reaching a combined value of Dhs 49.3 billion, compared to Dhs 45.2 billion in 2022, spurring economic growth by 1 percentage point.

Wholesale and retail trade

The value of this sector rose from Dhs 106.5 billion in 2022 to Dhs 108.6 billion last year, achieving a growth rate of 2%. Its contribution to the emirate’s GDP was 25.3%, driving economic growth by 0.5 percentage points.

Real estate activities

This sector was among the sectors that achieved the highest growth rates last year posting a 5.6% jump, driven by an increase in its total value from Dhs 32.1 billion in 2022 to Dhs 33.9 billion in 2023. This growth contributed 0.4 percentage points to economic growth in the emirate.

Financial and insurance activities

The value of this sector rose from Dhs 47.9 billion in 2022 to Dhs 49.4 billion in 2023, representing a growth rate of 3%. The sector contributed 11.5% to the emirate’s GDP, driving economic growth by 0.3 percentage points.