Dubai economy is among the most diversified in the region, with a range of activities such as trade, industry and various services. Oil and gas production contributes only a small amount to Dubai economy.
During the past decades Dubai became an attractive business environment that has brought in large amounts of foreign investment thanks mostly to the Free Zones (4 industrial, logistics, 3 media, 3 ICT, 2 financial, 2 aviation and 2 education zones).
Dubai Free Zones have been 100% successful since they allow a quick business establishment and guarantee 100% Foreign Ownership, 100% Repatriation of Capital, 0% Corporate/ Personal Tax, no restrictions on recruiting foreign national labour.
Jebel Ali, is one of the major Free zones in the emirate and is located adjacent to the emirate’s main port of the same name. The zone is around 48 square km in size, has a primary focus on industry and logistics and is home to more than 7000 companies. Dubai Multi Commodities Centre is considered the world’s largest free zone and deals with commodities trading and hosts more than 13,000 firms.
During the past years, profits growth has been affected in recent years by the knock-on effects of the fall in international oil prices and a consequent slowdown in neighbouring oil-dependent territories. Nevertheless, this has benefitted other sectors, such as transport, tourism and other indirectly related activities.
According to data collected from the Dubai Statistics Centre (DSC), the emirate’s GDP was $108.1bn in 2016, representing 31% of the UAE’s total GDP of $348.4bn, as reported by the World Bank.
Dubai’s economy grew by 2.9% in 2016, down slightly from 4.1% the previous year. However, World Bank figures recorded slightly higher real GDP growth for the emirate of 3% in 2016, down from 3.8% in 2015.
In the first quarter of 2017 Dubai’s GDP was recorded at $26.8bn. This gave an early signal that GDP growth would be around 3.2% for the year, meaning it would outpace the 2016 growth rate.
The largest sector of the economy by percentage of GDP in the first quarter of 2017 year was wholesale and retail trade, including the repair of motor vehicles and motorcycles, accounting for 24.8% of output. Other sectors such as transport and storage contributed with 12.3%, while financial and insurance activities (11.8%), and manufacturing (9.4%).
In early 2017 other sectors such as water supply, sewerage, waste management and remediation activities, increased by 50.1% but still contributed 0.0% to GDP.
The oil price recovery started only in 2016, which means more revenues into the treasury of the entire country together with the introduction of VAT at the beginning of the current year.
Plans to step up infrastructure investment ahead of Expo 2020 and further diversification of the economy by boosting manufacturing output mean the emirate has one of the most dynamic short- and medium-term growth prospects in the region.
EXPO 2020 is expected to draw in 25 million visitors, boosting private consumption and services exports. Growth in the non-oil economy should accelerate in the next coming years, on the back of strong investments. This will be possible also thanks to new reforms and incentives given to the owners of firms which are going to have various benefits such as complete foreign ownership
In addition, Dubai can count on the dynamism of its tourism sector.
According to Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, GDP is expected to increase 3.5% by the end of 2018 and 3.7% in 2019.