Dubai's economy grew 4% in first quarter on diversification boost

Dubai's economy grew by 4 per cent annually in the first quarter of 2025, backed by expansion across several key sectors.

The emirate's gross domestic product rose to Dh119.7 billion ($32.6 billion) in the three months that ended in March, Dubai Media Office said on Thursday.

The growth was driven by “strong performances” in key sectors, with human health and social work posting the highest year-on-year growth rate at 26 per cent to hit Dh1.9 billion, it said.

In terms of value, the wholesale and retail trade sector was the biggest at Dh27.5 billion, up 4.5 per cent year-on-year and contributing nearly a quarter to Dubai's economy in the first three months.

Activity in real estate, one of Dubai's most important sectors, rose 7.8 per cent to about Dh9 billion.

The volume and value of real estate transactions in Dubai rose sharply in the first half of the year amid the entry of more than 59,000 new investors into the booming market, Dubai Media Office said last month, quoting Dubai Land Department data.

The number of transactions reached 125,538, up nearly 26 per cent from 99,947 during the first six months of last year. The value of these transactions rose about 25 per cent to about Dh431 billion, “highlighting the strong growth momentum in the market”, the report said.

In the first quarter, financial and insurance, another key industry in Dubai, grew 5.9 per cent to Dh16 billion. Manufacturing grew 3.3 per cent to Dh8.7 billion.

Accommodation and food services posted a 3.4 per cent increase to reach Dh4.9 billion, the report found.

Dubai received 9.88 million international visitors in the first six months of 2025, Crown Prince Sheikh Hamdan bin Mohammed said this month.

Dubai's Department of Economy and Tourism said the latest figure represents a 6 per cent year-on-year increase. The data highlights Dubai's continuing growth as a global tourism hub, after the city welcomed a record 18.72 million international visitors last year.

Meanwhile, transport and storage added 2 per cent to Dubai's GDP in the second quarter, at Dh15.7 billion. Information and telecoms rose 3.2 per cent to Dh5.3 billion.

Overall, the trade, real estate, financial services, transport and industry sectors collectively contributed about 78 per cent of Dubai's total growth, the media office said.

“At a time when businesses, investors and entrepreneurs are seeking stability and certainty, Dubai’s sustained and diversified economic growth continues to underscore its global appeal,” said Hadi Badri, chief executive of Dubai Economic Development Corporation.

The emirate remains focused on boosting domestic and international partnerships through strategic initiatives to unlock "new opportunities, enabling innovation, and turning ideas and plans into scaleable, commercial successes", he added.

Dubai's economy has been expanding on the back of several government initiatives aimed at encouraging entrepreneurship and attracting international investments

The emirate is currently working towards its Dubai Economic Agenda, or D33, which aims to double the size of its economy to Dh32 trillion over the next decade and establish the emirate among the top three global cities.

The wider UAE has also undergone robust growth in its economy, which expanded by 4 per cent in 2024 to hit Dh1.776 trillion, driven by its non-oil sector as the country continues to diversify, official data showed in June.

The World Bank in June upgraded its economic growth forecast for the UAE to 4.6 per cent this year, up from its 4 per cent projection in January.

Emirates NBD, Dubai's biggest bank by assets, expects the emirate's economy accelerate to 3.7 per cent this year on the back of substantial project spending from both the private and public sectors.

The UAE has also been ranked as the world's second most preferred destination for foreign direct investments.

The Emirates, which received Dh167 billion in FDI last year, aims to increase that figure to Dh1.3 trillion by 2031.