Dubai bounces back with strong GDP growth

Dubai bounces back with strong GDP growth

 

Dubai enjoyed sustained economic growth in the second and third quarters of 2021 of 2021, according to official figures.

Data from the Dubai Statistics Centre (DSC) showed that the second quarter of 2021 saw the emirate’s GDP achieve 17.8% growth, while the third quarter saw 6.3% growth compared with the same periods in 2020.

The growth figures reflect Dubai’s resilience, its success in dealing with the pandemic, business support initiatives and growing investor confidence, said a report from the DSC explaining the stats.

One of the key factors behind the emirate’s GDP growth in the first nine months of 2021 was a 7.6% uptick in trading activities.

The trading sector, which represent 25.4% of the emirate’s economy, pushed up the growth rate by 1.9% and accounted for 30% of the total growth achieved.

 

Property sales drive growth

A big increase in property sales in Dubai was another key sign of accelerated economic growth and increasing investor interest. The sector saw growth of 23.3% in the first nine months of 2021, contributing 9.2% of GDP.

“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,” the DSC’s report noted.

The transport and logistics sector grew by 3% in the same period, contributing 9.6% to Dubai’s economy. The lifting of worldwide restrictions imposed during the pandemic enhanced the recovery of the sector, the statement added.

The accommodation and food sector recorded the highest growth, according to the report, with growth of 34% in the first nine months of 2021 compared with the same period in 2020. The number of guest nights in Dubai hotels rose by 53% in the first nine months of 2021 compared with 2020.

DSC data also revealed that manufacturing activity achieved a growth of 3.7% in the first nine months of 2021, accounting for 9.7% of the emirate’s economy and 5.9% of the total growth while financial and insurance activities achieved a growth of 4.4%.

 

Corporate tax first for UEA

The United Arab Emirates is planning to charge corporation tax for the first time, from 2023. The Gulf state plans to start small – the initial charge on profits will be 9%. In October 2021, the UAE joined 135 other countries in the OECD deal that would mean a 15% minimum corporation tax rate will be charged. The OECD believes that these new international standards will help tax transparency and help prevent under-cutting of tax rates.