Dubai's real Gross Domestic Product (GDP) showed a 3.5 percent decline year-on-year in the first quarter of 2020 mainly due to the impact of COVID-19 on the emirate's tourism and business sectors, latest data from Dubai Statistics Centre (DSC) revealed.
The emirate's GDP registered a growth of 2.2 percent in 2019. According to the statistics centre, strong management of repercussions of COVID-19 outbreak reduced economic impact of global crisis on Dubai.
Real estate activity registered a growth of 3.7 percent in Q1 2020 compared to Q1 2019, contributing 8 percent to the overall economy.
The finance and insurance sector recorded a slight growth of 0.3 percent and contributed 11.6 percent to Dubai’s overall economy in Q1 2020.
Dubai’s health sector declined by 3.7 percent in Q1 2020 due to the need to allocate the majority of health resources to combating the pandemic.
"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,” Arif Al Muhairi, Executive Director of DSC said.
However, trade, transport and storage activities shrank in Q1 2020 compared to Q1 2019. Though trading activity declined by 7.5 percent in the first quarter of the year, it retained its status as the largest contributor to the emirate's economy, accounting for 23 percent of total GDP.
Transport and storage activities declined by 5.5 percent but remained one of the highest contributors to Dubai’s economy accounting for 12.1 percent, placing it just behind the trading sector, according to DSC.
“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 accommodation and food services sector (hotels and restaurants) declined by 14.8 percent in Q1 2020. The sector contributed 5.1 percent to the overall economy of the emirate.
The decline was expected given the movement restrictions in place during the height of the lockdown as well as the prohibition of foreign and domestic tourism and the temporary closure of hospitality establishments.
(Writing by Seban Scaria; Editing by Daniel Luiz)
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