Dubai GDP growth averaged 2.9% in 2016

Dubai's GDP growth accelerated to 3.9 percent year on year in Q4 2016 from 3 percent in Q3, according to official data

Dubai’s GDP growth accelerated to 3.9% y/y in Q4 2016 from 3.0% in Q3, according to official data. For the whole of 2016, Dubai’s real GDP growth averaged 2.9%, down from 4.3% in 2015, and lower than we had forecast. Hospitality (restaurants and hotels) was the fastest growing sector in Dubai in 2016, at 10.6% y/y. This was followed by real estate services with 6.5% growth and transport (4.7%). The biggest sector in Dubai, wholesale & retail trade, grew 1.3% in 2016. The slight contraction in Dubai’s construction sector (-0.7% y/y) is surprising as the construction component of the Dubai Economy Tracker (DET) averaged 52.2 in 2016, signaling modest expansion, and the construction sector for the whole UAE grew 3.0% last year.
The Emirates NBD Dubai Economy Tracker (DET) Index points to higher GDP growth in Q1 2017, averaging 56.7 compared with 54.8 in Q4 2016 suggesting that overall economic expansion accelerated in the first quarter of 2017. We are optimistic that higher oil prices should contribute to improved sentiment in 2017 and we expect investment in infrastructure to underpin Dubai’s growth over the next few years as the country prepares for Expo 2020. We retain our estimate of 4.0% for Dubai’s real GDP growth in 2017.