In the first quarter of 2023, the UAE’s economy expanded by 3.8% compared to the same period in 2022.
According to an estimate from the Federal Centre for Competitiveness and Statistics, the GDP reached AED 418.3 billion. Notably, the sectors of transport and storage showed the highest growth, with an increase of 11% in Q1, while the construction sector expanded by 9%.

However, it’s important to note that both headline and non-oil GDP growth have decelerated when compared to the first quarter of 2022, which was anticipated due to slower global economic growth and rising interest rates. Additionally, the reduction in oil production will further impede economic growth in the second half of the year. Looking ahead to the full year 2023, we anticipate that non-oil growth will decrease from 7.2% in 2022 to 5%, and headline GDP growth will slow from 7.9% in the previous year to 2.9%. (UAE: Expanding Economy and Policy Initiatives Boost Labour Participation | Swiss Re, 2023)

In the UAE, inflation projections have been adjusted slightly, with expectations of 3.1% for 2023, down from 3.2%, primarily due to lower energy and food costs. Dubai’s Consumer Price Index (CPI) showed a Q1 2023 inflation rate of 4.6%, down from 4.8% in Q4 2022. Key factors contributing to inflation included housing costs, which rose by 4.9% in Q1 2023, and increased
prices for food and beverages, up by 6.0%.