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Dubai GDP grows to Dh398B

Dubai - Dubai's real estate activity grew by seven per cent in 2018

Dubai's economy grew 1.94 per cent in 2018 to hit Dh398.13 billion, driven by an upswing in trade and infrastructure investments. However, the growth was at the slowest pace since the contraction in 2009, according to data released by Dubai Statistics Centre (DSC).
Various economic stimulus packages unveiled by the government drove the growth by 2.2 per cent in second half of 2018 compared to 1.7 per cent growth in first half.
Revised government data showed the economy slowed from 3.1 per cent growth in 2017. The 2017 figure was revised from the previous growth figure of 2.8 per cent.
Arif Al Muhairi, executive director of DSC, said the competitiveness of Dubai's markets and the efficiency of its economy have stimulated the demand and reflected positively on the productivity of its various economic sectors and pushed the wheels of economy growth to reach nearly 2 per cent.
"The improvement in all economic activities reflects the extent of flexibility of Dubai's economy. This flexibility and constructive economic policies played a key role in achieving such a balanced economic performance and growth despite the current slow economic conditions dominating the global economy," said Al Muhairi. He said the GDP growth was largely driven by the trade sector, which grew by 1.3 per cent compared to 2017, accounting for 18.1 per cent of the total growth achieved in 2018 and 30 per cent of the total growth in the second half of 2018.
Dubai's real estate activity grew by seven per cent in 2018 and accounted for nearly 25 per cent of the total growth. The real estate sector growth was revised to 4.4 per cent in 2017.
Growth in the transport and storage sector slowed down to 2.1 per cent last year from a revised 8.4 per cent in 2017.
Passenger traffic at Dubai airports grew one per cent in 2018 to 90 million passengers. Accommodation and food services (hotels and restaurants) grew 4.5 per cent in 2018.
Financial and insurance sectors grew by 0.6 per cent accounting for 3.3 per cent of the GDP.
According to data released by the Central Bank of the UAE, total credit of all banks operating in the UAE increased by 4.8 per cent to reach nearly Dh1.6 trillion by end of 2018.
A report by independent research company Capital Economics Economic said growth in Dubai will hold up well at 3.8 per cent this year before a pick-up to 4.5 per cent next year due to a boost from its hosting of the 2020 World Expo Dubai, according to a report by independent economic research company Capital Economics.
Capital Economics said the property sector is likely to remain in the doldrums while a weakness in the global economy will weigh on Dubai's manufacturing and logistics sectors.
"But this should be more than offset by a step-up in preparations for, and the hosting of the 2020 World Expo Dubai," it said. Officials have previously estimated that Expo will provide a boost to the economy equal to $38 billion, or 33 per cent of GDP.
"Loan restructurings undertaken in 2014 have masked the Emirate's debt problems in recent years, but these are likely to come back to the fore once the Expo rolls out of town," Capital Economics said in its the latest Mena economics update.
Ahmed Mahboob Musabih, Director of Dubai Customs, said on Wednesday that the UAE's GDP is set to expand 3.5 per cent this year against 2.8 per cent in 2018, thanks to a stimulus package worth Dh50 billion announced last year along with measures for the ease of doing business.
According to Central Bank of the UAE's latest quarterly report, non-oil GDP growth will be at 3.4 per cent in 2019 against 2.6 per cent last year while oil GDP will expand at 3.7 per cent this year versus three per cent, the apex bank said.
- issacjohn@khaleejtimes.com