International Finance

Dubai’s GDP declines 3.5% in first quarter year-on-year

Dubai GDP

Dubai’s gross domestic product (GDP) contracted by 3.5 percent during the first quarter of the year, when compared to the same period from last year, according to the Dubai Statistics Centre (DSC).

The contraction in Dubai’s GDP is mainly due to the impact of the coronavirus pandemic on its tourism and business sectors.

Said that, real estate activity registered a growth of 3.7 percent in Q1 2020. Also, manufacturing and the government sector in Dubai retained their growth during the same period.

The Dubai Statistics Centre further revealed that the finance and insurance sector recorded a slight growth of 0.3 percent and contributed 11.6 percent to Dubai’s overall economy in the first quarter.

Arif Al Muhairi, Executive Director of DS C told the media, “Dubai’s economy witnessed healthy levels of growth in 2019. It was expected that in the first quarter of 2020, the economy will experience a decline due to the global impact of the COVID 19 pandemic.”

“The worldwide restrictions on movement for individuals through air, sea, and land entry points, as well as the unprecedented intensification of precautionary measures, which limited the flow of freight across borders, had significant repercussions on international trade and the global economy. Being a central player in international trade and a vital global passenger transit hub, Dubai’s economy was affected by these exceptional circumstances,” he added.

The UAE’s GDP is also expected to contract by 3.5 percent in 2020, according to the International Monetary Fund (IMF).

According to experts, UAE’s economy will recover to pre-Covid-19 levels only in 2022.

Besides COVID -19, there are other negative factors at play weighing on the UAE economy, such as low oil prices and a strengthening currency.

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