Dubai - Dubai's logistics and trading drive up GDP growth 3.9% in the first quarter.
Dubai's economy grew 3.9 per cent with its gross domestic product (GDP) rising to Dh88.7 billion during the first quarter of 2015, spurred by vibrant logistics and trading activities.
Dubai, ranked as the fifth fastest growing city economies in the world by a global think-tank, saw its economy sustaining the growth momentum with most sectors recording strong performances, figures released by Dubai Statistics Centre (DSC) revealed.
According to Arif Obaid Al Muhairi, executive director of DSC, logistics activities played a key role in supporting the overall growth of the emirate, along with a three per cent surge recorded by the wholesale and retail trade that contributes 26.9 per cent to the GDP.
Transport, storage and communications activities grew by 5.7 per cent in the first quarter, adding Dh14.2 billion in value to the economy. Manufacturing activity grew 4.1 per cent, adding Dh11.9 billion. Hotels and restaurants accounted for 9.2 per cent, adding Dh5 billion as the first quarter saw a remarkable expansion in tourism infrastructure.
The number of hotels grew 7.7 per cent while real estate and business services posted a 4.4 per cent surge. In the first half, Dubai's corporate earnings expanded 3.7 per cent year-on-year to $4.1 billion on the back of strong banking sector growth.
Dubai has been ranked among the top 10 cities that are powering economic growth within their nations, according to Brookings Institution's Global Metro Monitor. The report said Dubai's growth was boosted by a 4.7 per cent annual rise in employment.
"No metropolitan area grew faster relative to its national economy than Dubai, where the business and financial services sector helped drive 4.5 per cent growth in GDP per capita," the report said.
"Thanks to an ambitious strategy to diversify its economy, Dubai no longer relies on commodities to power its economic growth, and today the service industry accounts for more than 70 per cent of total GDP," said the report.
Overall, Dubai is ranked number five among the list of elite global metropolitan cities that are pushing the boundaries of the country's economic growth.
Dubai, targeting annual GDP growth of five per cent in its Dubai Plan 2021, faces three major economic headwinds: low oil prices, a strong US dollar and an 80 per cent fall in Russian visitors.
Hamad Buamim, president and chief executive officer of the Dubai Chamber of Commerce and Industry, argues that Dubai's trade was up five per cent despite these headwinds and that growth was coming off a six per cent growth in tourism to 11.6 million visitors in 2014 and an increase in hotel revenues from $3.5 billion in 2010 to $6.5 billion last year.
By 2021, the contribution of oil revenues to the UAE's GDP is set to drop from around 30 per cent at present to only five per cent.
In January, the International Monetary Fund (IMF) scaled down its growth forecast for the UAE on the back of a plunge in oil prices.
The Fund said that the UAE is expected to see GDP growth of 3.5 per cent in 2015 and 2016, down by one per cent from its October estimate. The IMF forecast that Dubai's economy is projected to grow by 4.5 per cent this year and 4.6 per cent in 2016.
Frost & Sullivan forecast in a study that robust non-oil activities, greater public sector spending and huge foreign reserves will propel the UAE's economic growth by 4.4 per cent to $440.18 billion in 2015 from $416.44 billion in 2014.
In the second half of 2015, the UAE economy is projected to grow by 4.5 per cent to record an annual growth of 4.4 per cent in 2015. In 2014, the gross domestic product of the UAE surged 4.3 per cent to $416.44 billion.
The launch of automation system's customers satisfaction index of the Government of Dubai