Dubai shows new wave of economic growth

Dubai Economic Council’s report shows Dubai's second quarter growth better than first

Dubai Marina
Image Credit: GN archive
An estimated 5 million tourists came to in Dubai during the first half of 2013.
Gulf News

The report Dubai Economic Outlook (DEO), Quarter 2/ 2013 issued by the Secretariat General of the Dubai Economic Council (DEC) indicated second quarter growth is better than in the first quarter of the year.

The report estimated the growth rate of real gross domestic product (GDP) to Dubai in the second quarter of 2013 by 4.7 per cent compared to the corresponding 2012 quarter. The growth was due to four sectors: wholesale and retail, transportation, manufacturing, and real estate.

Lower budget deficit

The public budget deficit decreased from Dh1.8 billion in 2012 to Dh1.5 billion in 2013 as a result of higher revenues by about 7.2 per cent from about Dh30.4 billion to Dh32.6 billion, increased government expenditure by about 5.8 per cent from Dh32.3 billion to Dh34.1 billion between 2012-2013. As a percentage of GDP, the budget deficit has dropped from about 0.6 per cent in 2012 to less than 0.05 per cent.

A striking recovery in the real estate sector

The report indicates that the real estate sector in Dubai has witnessed a new wave of growth during the second quarter of 2013 in terms of both value and number of apartments. The Dubai Marina area ranks first in the number and value of transactions with the largest transaction in the sector being made by Indians (27 per cent), followed by British (17 per cent), and Pakistani (15 per cent).

Tourism sector

An estimated 5 million tourists came to in Dubai during the first half of 2013. Saudis were the largest group on visitors. The number of hotel guests during the second quarter of 2013 to reach 2.12 million. The report showed that the hotel occupancy rate in Dubai reached 80 per cent during the second quarter of 2013 versus 76 per cent during the second quarter of 2012.

Dubai’s trade grew by 16 per cent during the first half of 2013

The value of Dubai’s foreign trade in the first half of 2013 to achieve a new record level reached Dh679 billion, compared to Dh584 billion in the same period of 2012, a growth of 16 per cent. The emirate’s exports (including re-exports) Dh272 billion, an increase of 16 per cent from the same period last year. Imports also rose to a record Dh406 billion, compared with 349 for the same period of last year.

Imports constitute the largest share of the total value of foreign trade of Dubai (about 60 per cent) in the first half of 2013, while exports account for 12 per cent and re-exports 28 per cent. Gold was the top commodities imported by Dubai during the first half of 2013 with a share of 20 per cent of total imports, followed by telephones for cellular and wired communications networks (10 per cent), and diamonds (7 per cent).

India, China and the USA, the most important trade partners of Dubai

The report stated that India is the largest trading partner of Dubai, where trade between them amounted to between Dh81 billion; China comes in second place (Dh63 billion), then the USA in third place (Dh45 billion). In fourth place comes the UK (Dh30 billion).

Financial sector

The second quarter of 2013 saw a growth of deposits and loans in Dubai’s banks. The growth rate of deposit was 0.4 per cent and for loans increased by 4.9 per cent compared to the previous quarter. The report confirms that the increase mentioned has led to a rise in loan-to-deposit ratio, which amounted to 90 per cent more than its counterpart with the first quarter of this year.

The second quarter of 2013 saw a growth in Dubai’s bank profits in compared to the first quarter of the same year. The increase in quarterly earnings by about 16 per cent.

Personal loans accounted for the lion’s share of the total loans, followed by manufacturing, and trade

As for the distribution of loans in Dubai, the report revealed an increase in the share of personal loans from 29.9 per cent in the first quarter of 2013 to 30.7 per cent in the second quarter of the same year. The manufacturing sector saw a rise in its share from 4.1 per cent to 6 per cent. The share of the trade sector has recorded a slight increase from 14.1 per cent at the beginning of 2013 to 14.2 per cent by the end of June 2013.

Dubai Financial Market (DFM) up

Stock markets in the UAE witnessed a remarkable state up in the indicators in the second quarter of 2013 compared with the first quarter of the same year. The Dubai Financial Market (DFM) index increased significantly at the end of the second quarter 2013, which amounted to about 21.5 per cent, compared with the previous quarter, and achieved 2222.57 points at the end of June 2013 compared to 1829.24 points at the end of March 2013.

Shares of real estate and construction sector is leading the market In terms of sectoral performance, real estate and construction sector still considered the most important element in the performance of the DFM indicator.

Infographic

Sectors share in Dubai GDP
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