Dubai's non-oil economy booms in December
Dubai's non-oil economy surged to its highest activity level in 16 months in December, capping the end to what has been a remarkable year for the city’s growth trajectory.
According to the S&P Global Dubai Purchasing Managers' Index, the sector's index reading rose to 57.7, up from 56.8 in November, signalling strong growth beyond the neutral 50-point mark.
S&P attributed the surge to a notable increase in new orders and a relaxation in cost pressures, allowing companies to offer more competitive prices. The wholesale and retail sector, along with travel and tourism, were particularly strong, contributing to the uptick in sales, the firm said.
David Owen, a senior economist at S&P Global Market Intelligence, highlighted the substantial improvement in business conditions. "The Dubai non-oil economy ended 2023 on a high, with PMI results indicating a substantial improvement and a 16-month peak in business conditions for December," he said.
The news provides a timely boost to Dubai's broader economic ambitions, as encapsulated in the Dubai Economic Agenda D33, which aims to double the city's GDP over the next decade. The plan includes ambitious projects with a combined economic target of AED32 trillion (US$8.71 trillion), focusing on doubling foreign trade and boosting foreign direct investment.
Tourism sector drives growth
According to the latest data published by Dubai’s Department of Economy & Tourism (DET), Dubai welcomed 15.37 million international overnight visitors between January and November 2023, a 20% increase over the same period in 2022 and a 3.5% rise compared to 2019, a year that saw a record 16.73 million international travellers visit the city.
Meanwhile, Dubai International Airport welcomed 22.9 million passengers in the third quarter of the year, marking the highest quarterly traffic since 2019. The surge in tourism contributed significantly to the city's economic momentum in the final months of 2023.
GDP growth surges in 2023
Dubai's overall GDP expanded by 3.2% annually in the first half of the year, reaching AED223.8 billion ($60.9 billion). The expansion was driven by key sectors such as transport, trade, financial services, and manufacturing.
To further bolster economic growth, Dubai has committed AED79.1 billion in government spending for 2024, with a view to achieving the objectives of its Strategic Plan 2030, according to a government statement.