Dubai Economy Grows by 4.5% at the End of 2015
Image : Aref Al Muhairi, DSC CEO
Dubai Economy Grows by 4.5% at the End of 2015
Dubai's economy witnessed an actual growth of 4.5% by the end of September 2015 compared to the same period in 2014, achieving by that an added value of AED 281.5 billion, according to DSC statistics.
Arif Al Muhairi, Executive Director of DSC stated that the numbers prove the solidity of the pillars of Dubai's economy in the light of such economic growth, along with the openness of Dubai's economy to most of the globe. He also pointed out the great benefit the economy gained from the diversification of economic activities, the excellence of logistic services and the reputation Dubai gained, plus its strategic role in linking the region to the rest of the world through its leading services such as re-exporting and shipping.
Dubai offers a developed infrastructure as well; competitive investment opportunities and an integrated legislative system which encouraged many international corporates to invest in the city and even to move their operations and headquarters to it, from which they can reach all the countries in the region to introduce their services and products. These all contributed to granting Dubai's economy flexibility to be able to adapt and develop, in addition to the stability the State enjoys, where it was not affected by the negative implications of the political situation of the region.
Efficiency and Capability
Al Muhairi sees that Dubai's economy continues to prove its efficiency and strong ability to handle the unpleasant status of global economy. Despite the global economic fluctuations, Dubai's economy is still moving with steady strides and was able to achieve such growth and limit the effects of economic fluctuations the world is witnessing nowadays in general and the region in particular, as a result of the drop in oil prices which naturally impacted most of the oil countries.
Restaurants and Hotels
Al Muhairi also spoke about restaurant and hotel activities, which witnessed a 9.4% growth, achieving an added value of AED 15.3 billion compared to AED 14 billion in the same period in 2014, hence being in the forefront of the other activities as regards growth rates. This was owing to the competitive service level enjoyed by Dubai hotel establishments and its globally leading hosting services, in addition to organizing a number of events, such as exhibitions and international conferences that help enhance demand on the services of this activity in particular, as well as the services of connected and supporting activities in general.
This was very evident through the growth achieved in the transport, warehousing and communication activities, which achieved a growth rate of 5.7% and the wholesale and retail trade activity achieving 5.1%, proving the connectivity and integration of the different economic activities. The restaurant and hotel activity contributed by 5.4% to the total actual GDP of Dubai, making the overall growth rate increase by 0.5 PP during the first 9 months of last year.
Wholesale and Retail Trade as the Greatest Growth Driver
The wholesale and retail trade activity continued to be in the forefront of the economic activities as regards its contribution to the GDP, as it contributed 28.4% to the actual GDP of Dubai, with a growth rate of 5.1%, realizing and added value of AED 79.9 billion, making the total economy of Dubai grow by 1.4 PP as a result. Arif Al Muhairi pointed out that retail trade is a main element in different economic activities, as it satisfies their needs of commodities as well as provide consumers with their needs.
He added that this activity's continuing to be in the forefront of the other activities as regards its contribution to the economy is in line with the role played by this strategic activity and the diversity and accumulation of experience in the business sector in local, regional and international trade. He pointed out that the trade activity largely benefits from the competitive advantages offered by the advanced infrastructure and logistic services Dubai provides to enhance and support trade operations, especially in the areas of exporting and re-exporting.
Transport, Warehousing and Communications
The transport, warehousing and communications activity achieved an increase of 5.7% and it contributed 15.8% to Dubai's actual GDP till the end of September 2015, compared to the same period of 2014, hence impacting the total economy positively by 0.9 PP. Data shows that air transport was the main contributor to the realized growth of this activity, followed by the increase in the supporting and assisting activities related to the transport sector.
There is a significant growth in the land and marine transport due to the government initiatives that gave land and marine transport priority due to the government's keenness to satisfy citizens and residents as well as support logistic needs that drive economy. This is achieved through the giant road projects and expansion in the public transport network of buses, metro, tram and public marine transport so as to enhance the efficiency and the capacity of marine and road transport in general. Al Muhairi considered that the growth in the transport, warehousing and communications activity comes in line with the strategic role it plays in serving the different economic sectors and its great connection with them.
Real Estate and Business Services
Estimations of the actual GDP show that the real estate and business services sector comes in third place as regards its relative importance, as it contributed 15.2% to Dubai's actual GDP in the first nine months of last year, compared to the same period of 2014. It realized a growth of 4.4%, making the total economy grow by 0.7 PP and realizing an added value of AED 42.7 billion. The stability and growth achieved in the real estate activity come as a result of the regulating policies and legislations adopted by the government to control this activity, which positively reflected on it and limited its fluctuation.
Al Muhairi advised that the manufacture activity achieved a growth rate of 3.1% and contributed 11.1% to the real GDP. The total added value of this activity amounted to AED 31.2 billion, compared to AED 30.2 billion during the same period of 2014. He pointed out that the manufacture activity occupies an advanced place in Dubai's economy and is considered one of the supporting sectors for development that significantly advanced during recent years, due to the policies and strategies supporting this vital economic activity.
The government targeted the manufacture sector as a main axis of sustainable development in Dubai's economy. The impact of plans and strategies is evident in the growth achieved in national export of industrial products in the areas of machinery industry, mechanical equipment, transport equipment, basic metals, chemical units and food and beverages, through providing supporting facilities and utilities for the manufacture sector and its supplementary services, such as storage solutions, logistic support, labor cities, modern offices, vocational training and commercial lands, as well as policies, legislative constructive environment and the leading initiatives and diversity of free zones in Dubai. Economic indices showed that the total exports of manufactured, durable and semi-durable goods achieved a growth rate of 27% compared to the exports in the first 9 months of 2014. This was reflected on the performance of the manufacture activity in the first 9 months of the previous year 2015.
The performance of the financial project sector was positive same as the other economic sectors and activates, as it achieved a growth rate of 3.1%, hence impacting Dubai economy positively 0.4 PP, achieving and added value of AED 33 billion.