Government Fund records major profits

The Investment Corporation of Dubai (ICD) has announced a record profit of AED36.1 billion ($9.8 billion) for 2022, driven by the rebound in Dubai’s tourism sector following the Covid-19 pandemic, high oil prices, and a strong performance in the banking industry. The sovereign wealth fund reported a 58% increase in revenues, reaching AED267.4 billion for the year. The fund attributed its success to the growth in oil and gas revenues, the surge in travel and tourism activity, and the solid fundamentals of the real estate sector.

Mohammed Ibrahim Al Shaibani, the Managing Director of ICD, highlighted the improvements seen across all businesses. The fund’s profit margin was boosted as revenue growth outpaced operational costs. The banking and financial services sector was the largest contributor to profits, accounting for AED15.3 billion or 42% of the total. The ICD’s assets were valued at AED1,177 billion ($320.5 billion) at the end of the year, positioning it just outside the top ten largest sovereign wealth funds globally.

ICD holds stakes in key players within Dubai’s economy, including Emirates NBD and Dubai Islamic Bank, Emirates and FlyDubai airlines, Enoc oil and gas company, and Emaar real estate developer. The positive performance of the Dubai economy is further supported by recent data, particularly in the crucial tourism sector. In 2022, Dubai welcomed 14.4 million international overnight visitors, closing the gap on the pre-pandemic level of 16.7 million in 2019. The first quarter of 2023 also saw strong tourism numbers, with 4.7 million visitors, nearing the 2019 equivalent of 4.8 million.

Foreign direct investment (FDI) in Dubai increased by 80% in 2022, reaching AED47 billion. Canada, the UK, and the US were the main sources of inward investment. Although the figure was 28% below the pre-Covid peak in 2019, local authorities aim to raise FDI to AED60 billion per year by 2033. This aligns with the broader plan to double Dubai’s economy, aiming to raise its gross domestic product (GDP) from AED400 billion to AED800 billion by 2033. The economy is projected to grow by 3% in 2023, with strong momentum in sectors such as hospitality, real estate, trade, and financial services. The UAE’s continued openness to Russian nationals and capital has also contributed to the emirate’s economic growth.