According to a survey by the research firm BMI, the retail, transportation, and storage sectors have been the engine driving Dubai’s economic revival, allowing the city to reclaim 98% of its pre-pandemic size.
BMI predicts that Dubai’s GDP growth would slow from a projected 4.2% in 2022 to 3.4% in 2023 due to lower oil prices, notwithstanding the city’s robust rebound. GDP growth rates are likely to exceed the average of 3.1% seen between 2015 and 2019 despite the looming slowdown, therefore the forecast is positive.
“We believe that the ongoing rebound in the emirate’s key sectors, which have yet to fully recover from the pandemic, will keep growth above the historical trend in 2023,” the research said.
BMI predicts a modest 10 percent increase in tourist arrivals to the UAE in 2023, following a dramatic 55 percent increase in 2022. This is due to a slowdown in the growth of sectors such as accommodation and food services.
Dubai’s economy is flourishing
Dubai’s tourism industry posted solid results in April 2023, with 6.02 million visitors in the first four months of the year, representing an 18 percent year-on-year gain. This is a decrease of only 4 percent compared to pre-pandemic levels.
According to estimates by Emirates NBD Research, the city experienced a record 1.35 million visitors during the Ramadan season, a rise of 19% from 2022 and 50% from pre-pandemic levels in 2019.
BMI predicts that major contributors to Dubai’s GDP in 2023 will come from the wholesale and retail sector, transportation and storage, finance and insurance, manufacturing, real estate and construction.
They also expect growth in the transportation and storage sector to remain robust, benefiting from the normalization of global trade, the recovery of Mainland China, the emirate’s main trading partner, resilient demand in neighboring Gulf countries, and the authorities’ increased efforts to boost foreign trade, the report said.
Companies listing on the Dubai Financial Market and the thriving local private equity market both bode well for the financial industry, which should continue its ascent.
To read our article about “Pakistan to refund $10.35 bn foreign debt till Dec end 2023” click here.
