Dubai's economy expanded 4.6 per cent year on year in 2013, up from 4.1 per cent in 2012 according to Dubai Statistics Centre (DSC).
The DSC report showed that the fastest growing sector in Dubai last year was once again hospitality, which recorded 13 per cent growth, the third consecutive year of double-digit growth in this sector.
This was followed by manufacturing sector which grew 8.1 per cent year on year, social and personal services with 6.8 per cent growth and transport, storage and communication that grew 5.6 per cent.
"Although the official growth rate for Dubai was largely in line with our long-standing forecast of 4.5 per cent, recently released 2013 GDP data for Abu Dhabi (5.2 per cent) and the whole of U.A.E. (also at 5.2 per cent), published by Statistics Centre Abu Dhabi and the National Bureau of Statistics respectively, implied that Dubai's growth should have been of a similar magnitude,” said Khatija Haque, Head of MENA Research at Emirates NBD.
Dubai accounts for approximately 30 per cent of the U.A.E.'s GDP. As expected, the construction sector expanded for the first time since 2008, albeit marginally, at just 1.3 per cent year on year.
Real estate and business services grew 4.7 per cent year on year, slower than the 5.4 per cent growth achieved in 2012. Retail and wholesale trade, which accounts for around 30 per cent of Dubai's economy, grew 3.5 per cent last year up from 1.4 per cent in 2012.
Financial services growth also accelerated to 3.6 per cent last year from 2.2 per cent in 2012. In contrast, government services grew 1 per cent in 2013, down from 6.4 per cent in the previous year, as the Dubai government further consolidated the budget.
The International Monetary Fund (IMF) and the Institute of International Finance (IIF) have forecast Dubai's GDP growth in excess of 5 per cent in 2014. While construction and real estate sectors are expected to drive the strong growth other key sectors trade, transport and tourism are expected remain robust.
Leading financial indicators such as equity market valuations, real estate prices, business confidence index and the evolution of credit default swaps (CDS) [the cost of insuring against default] point towards strong non-oil sector growth this year. Dubai's sovereign CDS spreads declined from 226 basis points (bps) in 2012 to 155 at the close of the first quarter of this year indicating improved market confidence in government debt and creditworthiness of government related entities.