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 Dubai Economic Report 2019

Full Report

Foreword

In Brief
 

Dubai and the Global Economy (in 2018-2019) - Chapter 1

Dubai's economy is closely impacted by the current global economic landscape which is experiencing both risks and encouraging signs of recovery. This chapter explores the issues that are impacting macroeconomic developments and share forecasts for the growth in the global GDP, selected advanced and emerging economies and the UAE. Background data on monetary and financial conditions is also presented on Dubai's main trading partners and major players such as China, India, the US, the EU and Russia.


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 Infographic: Growth Slows in Global Environment
 

Recent Developments in Dubai's Economy - Chapter 2

This chapter reviews the macroeconomic performance based on the main indicators of Dubai’s economy: real GDP growth rates, the sectoral contributions to GDP growth, inflation, labor market developments, Dubai’s foreign trade, money and liquidity, interest rates and the finances of Dubai’s Government, concluding with the outlook for Dubai’s economic growth in 2019-2020.

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Infographic: Diversified Economy Underpins Dubai’s Strength
 

Mapping Dubai’s International Trade Advantages in Goods and Services – (Theme of the Report) - Chapter 3

Dubai is one of the most open economies in the world and has a strong reliance on foreign trade for economic growth. This chapter discusses the importance of leveraging Dubai to preserve its position as trade hub for the region and intermediating and connecting trade flows within the region and globally. The discussion highlights the fast growth in the importance of trade in services in the global economy and identifies viable opportunities for Dubai to strategically grow trade in services that goes beyond port operations, logistics or air transport. These are services that boost trade flows to and from Dubai and where Dubai can play a key role in their supply.

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Infographic: Dubai’s Trade Advantages in Goods and Services

Wholesale and Retail Trade - Chapter 4

Wholesale and retail trade is the most important activity in the services sector in Dubai and in 2018 it represented 26.4 per cent of GDP (in constant prices). The wholesale and retail sector has evolved over the years, due to factors such as the creation of a modern and robust infrastructure, effective distribution channels to neighbouring emirates, rapid urbanization and tourism, as Dubai is the number 1 shopping destination. This chapter identifies strengths and challenges to Dubai’s wholesale retail trade, chiefly, the growth in popularity of e-commerce and an oversupply of retail space are perceived threats to retail & services.
 
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Infographic: Wholesale and Retail Lead Dubai’s GDP

Transport, Storage, Communications and Information Technology - Chapter 5

This chapter highlights the importance of these sectors as drivers of economic growth and foreign investment, and endowed with a well-managed infrastructure to effectively support transport of people, goods and services in and around the country. Dubai has developed a world class road system and modern public transportation system by metro, bus, taxi, waterbuses and ferries, and mass transit. Dubai also has developed a high quality infrastructure for maritime transport and ranked ninth in the Leading Maritime Capitals of the World Report 2019, issued by Menon Economics. The ICT sector is attractive to investments and the UAE is projected to increase its spending on ICT, including software, to reach US$ 17.8 billion in 2019 in comparison with US$ 17.3 billion in 2018.

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Infographic: Economic Growth Promoted by World Class Transport & ICT Infrastructure

Banking, Insurance and Capital Markets - Chapter 6

Banking, insurance activities and capital markets accounted for the third largest sectoral contribution to Dubai’s GDP in 2018 generating value added of AED 40.4 billion or 10.2 per cent of the total. Banking was the largest direct contributor within the sector to Dubai’s economy. Moreover, the Emirate is a major city for the UAE insurance sector as a whole. The gross written premiums in Dubai’s insurance activities represent 62 per cent of the total in the UAE in 2018. In addition, Dubai is an important regional hub for capital market activity hosting a domestic stock exchange, Dubai Financial Market and an international capital market, Nasdaq Dubai. The latter is major capital market for Islamic finance. The total value of Sukuk listed on Nasdaq Dubai reached a global record of US$ 60 billion in 2018.

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Infographic: Global Leader in Banking, Insurance, Islamic Finance

 

Industry - Chapter 7

Dubai’s industrial sectors comprising the value added produced in Manufacturing, Construction, Electricity Gas and Water Supply and Mining and Quarrying are the primary pillars of the economy due to their numerous contributions to economic and social development of the Emirate and importance in supporting the output of other sectors. The Dubai Industrial Strategy 2030 aims to boost the global competitiveness of Dubai’s industrial sectors and make them a powerful economic growth engine. To this end, key performance indicators (KPIs) were set to assess achievements of the adopted initiatives to drive growth and increase the sector’s contribution to the Emirate’s GDP.

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Infographic: Economic Growth Promoted by World Class Infrastructure

Real Estate Activities - Chapter 8

The real estate sector in Dubai is fueled by property acquisitions by expatriates from a broad pool of nationalities and freehold investments by foreign investors. Real estate activities in Dubai generated value added of AED 28.7 billion in 2018, increasing by 7 per cent, over three and half per cent the growth rate of the real GDP. However, transactions (sales and mortgages) in the Dubai real estate market decreased in terms of value and number in 2018, declining in value from AED 284 billion in 2017 to AED 223 billion in 2018. The government issued a set of ownership incentives to promote Dubai and the UAE as an attractive destination for expatriates, working individuals, tourists and businesses into the residential real estate sector.

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Infographic: Real Estate Incentives Attract Investment

Tourism - Chapter 9

This chapter highlights the tourism sector’s important contribution to Dubai’s economic growth and how it is fundamental to the successful diversification of the emirate’s economy and that of the UAE as a whole. Tourism defined to include Accommodation and Food Services activities (restaurants and hotels) generated AED 20.1 billion of value added and contributed 5.1 per cent to real GDP compared to 3.5 per cent in 2009, showing the sector has risen faster than Dubai’s real GDP during the same period. As Dubai becomes a more expensive travel destination for visitors with non-US Dollar pegged currencies, the tourist market has come under pressure. However, the relatively diversified spread of source markets and the growth of demand from new markets (especially in Asia), have helped to minimize the impact on occupancy rates. In consequence, hotel operators were able to maintain the average occupancy at 76 per cent for 2018. While the tourism sector aims to maintain a high growth of visitors to the Emirate in the coming decade, Dubai also has been pursuing sustainable tourism initiatives in the form of ecotourism.

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Infographic: Dubai is the Fourth Global Tourist Destination after Bangkok, London and Paris
 

Developments in Social Indicators - Chapter 10

This chapter highlights recent social developments based on a number of indicators, related to population, education and health. At the end of 2018, the population of Dubai reached about 3.19 million people. Dubai’s population has grown well-educated and happy: 36 per cent of the total population now hold university or higher education qualifications, up from 17 per cent in 2000. Over 80 per cent of students report feeling happy and optimistic about their lives. Life expectancy at birth in Dubai has risen to 80.7 years, the highest among the MENA countries, and the mortality rate for children has declined. The government has been keen to provide social services to its people, and this effort contributed to the UAE maintaining its first place among Arab countries and the 21st place worldwide in the World Happiness Report 2018.

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Infographic: Well Educated Population and Continuing Growth in Education, Health and Happiness

 

 

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