- Substantial upswing in Q2 and Q3 drives Dubai’s economic acceleration in the first nine months of 2021
- Second and third quarter of last year sees growth of 17.8% and 6.3% respectively, according to data released by Dubai Statistics Center
- Accelerated economic recovery demonstrates Dubai’s resilience, success in curbing the pandemic, strategic policy measures, business support initiatives and growing investor confidence in the emirate
- 7.6% growth in trading activity reflects Dubai leading role in enhancing the openness of global trade
- Strong uptick in real estate sales in Dubai; sector achieves 23.3% growth in ‘value added’ in the first nine months of 2021
- Accommodation and Food activities record highest growth with an expansion of 34%
A substantial economic upswing in the second and third quarters of 2021 enabled Dubai to achieve rapid economic acceleration in the first nine months of last year. The second quarter of 2021 saw the emirate’s GDP at constant prices registering 17.8% growth, while the third quarter witnessed 6.3% growth from the corresponding period in 2020, according to data released by Dubai Statistics Center (DSC).
In the first nine months of 2021, Dubai's GDP at constant prices achieved a growth rate of 6.3% compared to the same period in 2020. The growth figures, which compare favourably with major global economies, reflects Dubai’s resilience, its success in curbing the COVID-19 pandemic, strategic policy measures, business support initiatives and growing investor confidence in the emirate, which has been strengthened by the successful hosting of Expo 2020.
Success of government policies and measures
The DSC report states that the economic growth achieved in the first nine months of 2021 demonstrates the success of government policies and measures aimed at mitigating the economic repercussions of the global pandemic. The government introduced a diverse array of programmes that enhanced the business sector's ability to adapt to the pandemic’s impact on the international economy.
Data on the third quarter of 2021 showed that Dubai’s growth compared favourably with some of the world’s major countries in the same period. According Q3 2021 statistics issued by the Organization for Economic Co-operation and Development (OECD), India grew by 8.6%, Singapore by 7.1%, United Kingdom by 6.8%, KSA by 6.2 %, Luxembourg by 5.3%, United States by 4.9%, China by 4.9%, and France by 3.3% in the third quarter of 2021 compared to the same period in 2020. The growth reflects Dubai leading role in enhancing the openness of global trade and its ability to benefit from international economic development.
Robust trade growth
One of the key factors behind the emirate’s GDP growth in the first nine months of 2021 was a 7.6% growth in Trading activities compared to the same period in 2020. The Trading sector, which represented 25.4% of the emirate’s economy, pushed total economic growth rate by 1.9 percentage points and accounted for 30% of the total growth achieved. The performance of the sector reflects the strategic importance of trade in Dubai’s economy and the emirate’s supportive policies and high-quality trade-enabling services.
Strong revival of Real Estate activities
The strong uptick in Real Estate sales in Dubai in the first nine months of 2021 was another key sign of accelerated economic growth and increasing investor interest. The Real Estate sector achieved a growth in ‘value added’ of 23.3% in the first nine months of 2021, contributing 9.2% of GDP and an added value of AED 27.2 billion, driving the emirate’s overall economic growth by 1.8 percentage points and accounting for 29% of overall growth. Data issued by the Land Department revealed that real estate sales witnessed an unprecedented growth in the first nine months of 2021, a period in which rents declined by 9%. The emirate’s ability to overcome the impact of the pandemic and its emergence as one of the world’s safest destinations increased demand for real estate in Dubai. Another major factor that contributed to the real estate rebound was the government’s constructive economic policies and initiatives launched to enhance investment and encourage investors to reside and work in Dubai.
Transportation and Storage
Transportation and Storage activity grew by 3% in the first nine months of 2021, achieving a ‘value added’ of AED 28.6 billion, contributing 9.6% to the emirate's overall economy. The Transportation and Storage activity sector includes passenger and freight transport, by land, water and air and associated activities such as terminal and parking facilities, cargo handling and storage. Air transport, which plays a pivotal role in supporting other economic activities, is one of the highest contributors to the transportation and storage sector in terms of production value, the ‘value added’ created by it and value of investments. The emirate’s Transportation and Storage sector is well integrated with key sectors that drive demand such as tourism and trade.
Air transport activity is sensitive to global economic developments as it serves as a link between the emirate’s economy and the international economy. This was demonstrated during the pandemic and the start of global recovery. The lifting of worldwide restrictions imposed during the pandemic enhanced the recovery of the sector.
Accommodation and Food sector record the highest growth
According to the DSC report, Accommodation and Food activities achieved a remarkable growth of 34% in the first nine months of 2021, compared to the same period in 2020, contributing 4.3% to the emirate’s economic performance and pushing overall economic growth by 1.1 percentage points. The report revealed a remarkable improvement in hotel sector indicators since the beginning of 2021, which reflects the global attractiveness of Dubai's tourism sector and its ability to overcome the impact of the pandemic. The number of guest nights in Dubai hotels went up by 53% in the first nine months of 2021 compared to 2020.
DSC data revealed that Manufacturing activity achieved a growth of 3.7% in the first nine months of 2021, compared to the same period in 2020. The sector contributed to raising the emirate’s overall economic growth by 0.4 percentage points with a ‘value added’ of AED28.8 billion. The sector also accounted for 9.7% of the emirate’s entire economy and 5.9% of the entire growth achieved in the first nine months of 2021.
Continued growth of the Financial sector
Financial and Insurance activities, which contributed 10.8% of Dubai’s total GDP, achieved a growth of 4.4% in the first nine months of 2021. This was driven by the robust growth of the banking sector. The decline in interest rates of loans by 16% and deposits by 33% contributed to the growth of the sector. The continued positive performance of the financial sector provided a key stimulus for the growth of other economic sectors.
News Source: Dubai Media Office