A recent article in thenational.ae has very aptly spoken about the challenging times that could lay ahead for many of the expats living in the UAE. With the dreaded inflation rising, and at its highest level since 2009, the signs are all there indicating a probable economic slowdown. The first sign of this was the rise in fuel prices.
The author of the article contends, "It is nigh impossible to budget intelligently when this sort of thing comes out of nowhere, and so the key to survival is to simply cut back on spending in general and make sure the emergency fund is well stocked."
The article further explains how a domino effect has today resulted in this sticky situation. "At the start of the year, the IMF advised Gulf countries to cut state-funded jobs and say no to salary increases. It further downgraded growth in the UAE in April, and this month is continuing to recommend spending cuts and taxation. If anyone’s for the chop, it makes sense that expatriates would be the first to go."
While the official reason for the hike in petrol prices is to “rationalise consumption”, the Fuel Price Committee’s priority is supporting the national economy, lowering fuel consumption, protecting the environment and preserving national resources.
The very fact that wheel has been set in motion, of spending cuts and removing subsidies, the time has arrived for expats in the UAE to tighten their own purse strings and observe a conservative approach to spending.