https://arab.news/6q7c9
RIYADH: The retail, transportation and storage sectors have been the engine behind Dubai’s economic recovery, enabling the city to regain 98 percent of its pre-pandemic size, according to a report from research firm BMI.
Despite the city’s strong resurgence, BMI anticipates a deceleration in Dubai’s gross domestic product growth from an estimated 4.2 percent in 2022 to 3.4 percent in 2023 as the result of softer oil prices.
In spite of this impending slowdown, growth projections remain optimistic as GDP rates are expected to surpass the average of 3.1 percent recorded between 2015 and 2019.
“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 report stated.
BMI expects a slower growth pace in sectors including accommodation and food services, and foresees a mere 10 percent increase in tourist arrivals to the UAE in 2023 after a robust 55 percent surge in 2022.
Despite a minor shortfall of 4 percent compared to pre-pandemic levels, Dubai’s tourism sector delivered a strong performance in April 2023, attracting 6.02 million visitors in the first four months of the year, marking an 18 percent year-on-year increase.
According to Emirates NBD Research calculations, a record-breaking Ramadan season saw 1.35 million visitors flock to the city, reflecting a 19 percent growth from 2022 and a 50 percent increase compared to pre-pandemic levels in 2019.
According to BMI, sectors like wholesale and retail, transportation and storage, financial and insurance as well as manufacturing, real estate and construction are projected to significantly contribute to Dubai’s GDP in 2023.
“We also anticipate growth in the transportation and storage sector will 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 added.
Furthermore, the financial sector is expected to maintain its upward trajectory, buoyed by listing of companies on the Dubai Financial Market and the continued momentum in the local private equity market.