Dubai’s economy has nearly reached its pre-pandemic size, says global ratings agency

Dubai’s economy has nearly reached its pre-pandemic size, says global ratings agency

Dubai has nearly reached its pre-pandemic size following a strong bounce back in the past two and a half years, driven by all the key strategic sectors.

According to Fitch Ratings, the emirate’s economy has gained back around 98.0 per cent of its pre-Covid-19 size.

However, it expects that Dubai’s real GDP growth will decelerate from an estimated 4.2 per cent in 2022 to 3.4 per cent in 2023 amid lower oil prices and a higher cost of borrowing.

However, despite the slowdown this year, the growth will remain above the 2015-19 average of 3.1 per cent, it said.

“We believe that the ongoing rebound in the emirate’s key sectors, which have yet to fully recover from the pandemic, will keep growth above the historical trend in 2023. We expect activity in the wholesale and retail sector (which account for 26 per cent of total GDP) will pick up helped by a growing population and the sustained influx of tourists, especially those with elevated purchasing power,” the global ratings agency said.

The slowdown in the emirate’s growth relative to the rate in 2022 is largely due to fading base effects.

For instance, Fitch’s tourism team forecasted that tourism arrivals to the UAE will grow by only