(MENAFN- Khaleej Times) Dubai - Diversification, openness and ease of doing business have reinforced Dubai's position in the global economy, which is expected to post 3.5 per cent growth in gross domestic product (GDP) this year, according to the latest report.
Dubai Economic Report 2017, which was approved by Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, showed that the emirate's economy continued to perform well last year by posting 2.9 per cent real GDP growth.
"Dubai was able to achieve growth rates that exceeded that of developed economies despite the decline in oil prices. Growth in 2016 was supported by growth in key economic sectors, such as manufacturing, transport and storage, real estate, finance and insurance, wholesale and retail trade and tourism," according to the report.
Key economic sectors accounted for 77.2 per cent of Dubai's GDP of Dh376.8 billion last year as all sectors, excluding the construction sector, achieved positive growth rates. The wholesale and retail trade sector, which also includes the repair of automobiles, accounted for 27.5 per cent of GDP and 22.4 per cent of total employment. In spite of a slowdown in 2016, the sector is expected to spring back to rates close to the overall growth of the Dubai economy.
The report shows that the vitality of Dubai's economy is due to the strong foundations on which the government is based and the effective policies being adopted to stimulate diverse economic activities, especially in the tourism, air and sea transport and real estate sectors.
It has also helped to strengthen Dubai's openness and develop partnerships with many countries in the region and the world, attracting companies, investment and tourism from all over the world.
"The journey of comprehensive and sustainable economic development in Dubai revolves around innovation and high productivity. The vitality enjoyed by Dubai's economy is based on the strength of its foundations," Shaikh Hamdan said.
The report shows that the prospects for the growth of Dubai's economy in 2017 is promising. The emirate's economy is expected to achieve a real growth of 3.2 per cent or higher due to the continued recovery of the global economy in 2017 and improved growth rates in developed, emerging and developing economies.
Strategic initiatives adopted by the government of Dubai during the past years to cover Islamic economy and innovation as well as the Smart City programme and hosting Expo 2020 in addition to the mega projects announced by the government aimed at diversification and sustainability, including major road and transport infrastructure projects estimated at Dh15 billion, will take Dubai past various milestones and other major economies regionally and globally, according to the report.
"The government establishing effective economic policies to stimulate various economic activities, especially in sectors such as tourism, aviation and maritime transport, and real estate activities, has helped bolster the openness of Dubai's economy and the establishment of a network of regional and international partners," Shaikh Hamdan said.
The economic report further said Dubai has paid great attention to developing transportation, storage, communications and information services, which together accounted for 16 per cent of GDP in 2016. Transport and telecommunication sectors posted 4.7 per cent and 3.6 per cent growth, respectively.
In 2016, the hospitality sector (5.1 per cent of GDP) had the highest growth (10.6 per cent), followed by the real estate sector (6.5 per cent), transportation and storage (4.7 per cent), manufacturing (3.4 per cent), wholesale and storage, and financial activities (5.1 per cent) and insurance (1.3 per cent).
According to the MasterCard Global Destination Cities Index, Dubai has maintained its position as the world's 4th largest tourism destination after Bangkok, London and Paris last year. The 2016 mobile subscription index of the World Bank ranked Dubai the first in the world, with 235.2 telephone lines per 100 inhabitants, and 23.1 Internet lines per 100 inhabitants, which is higher than the GCC average.
The industry sector comprising manufacturing, mining, quarrying and electricity is a leading sector in Dubai's economy. In 2016, the sector ranked fourth in Dubai's economy after wholesale and retail trade, transport and storage, and financial services.
Manufacturing contributed about 10 per cent of GDP in 2016 and recorded an increase in value added equivalent to 3.4 per cent compared to 2015. The Government of Dubai is adopting policies to help increase the contribution of the industrial sector to the same or higher than in emerging and developed countries. The Dubai Industrial Strategy 2030 seeks to restructure the local economy in line with developments in the global economy, especially with regard to access to sectors with high value-add and competitiveness.
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