موقع إخباري يهتم بفضائح و انتهاكات دولة الامارات

In new evidence of the economic crisis… foreign institutions reduce employees in UAE

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Foreign institutions and banks operating in the UAE have resorted to reducing their employees, the latest evidence of the deepening economic crisis in the country, which is escalating record for years and is warned of its arrival to the point of explosion.

A unit of Standard Chartered Bank cut more than 100 jobs in the retail sector in the UAE in August, while official data show the banking sector and many activities are under pressure due to the slowing economy in the country.

In its 2018 annual report, Standard Chartered cited the UAE as one of the low-yielding markets, noting that its operating income fell in 2018 to $ 637 million from $ 733 million the previous year.

Activities have come under pressure from a slowdown in the economy and a downturn in the real estate sector, prompting Fitch Ratings, a global rating agency, about a week ago to warn of risks related to the quality of banking assets in the UAE.

Fitch said UAE banks are facing a growing risk as asset quality deteriorates due to a weak real estate sector caused by falling prices.

Property prices fell by 20 per cent from 2014 levels, and some projects that were under construction before the price drop faced significant delays. “Loans are being increasingly restructured, mostly through extension of the term, while some Real estate developers are suspending payments to contractors. ”

The UAE economy is threatened by recession as oil revenues decline and the continued contraction of many key economic sectors.

Non-performing loans in the UAE are expected to rise this year, prompting banks to merge to maintain their presence, Bloomberg said in mid-January.

In June, the emirate of Dubai issued a new bankruptcy law to deal with corporate financial failures, as the oil-rich emirate of Abu Dhabi is poised to borrow again, according to official reports.

Recent economic steps by the UAE, along with international economic reports, prove that the country is going through a major crisis as a result of a fiscal deficit that has caused concern to venture capitalists, prompting many of them to leave the country.

The most important economic sectors on which the UAE relies are real estate, which appears to be experiencing a major setback, falling since 2015 due to oversupply, weak consumer confidence linked to lower oil prices, and a less supportive economic environment.

Lower prices have delayed potential buyers, and foreign buyers have been deterred by the appreciation of the UAE dirham, geopolitical tensions and weak confidence in the UAE.

Some real estate projects that began before the price drop faced significant delays; “loans are increasingly restructured, mostly through extension of the term, while some developers have suspended payments to contractors.”

On the other hand, the Emirate of Abu Dhabi has returned to borrowing from international markets again; to enhance the financial revenues in the country, in order to fill the deficit faced in its public budget.

Abu Dhabi plans to sell $ 10 billion in three-tier bonds, the first such move in nearly two years, to take advantage of the relatively low cost of borrowing.

Abu Dhabi will sell five-year bonds worth $ 3 billion, 10-year bonds worth $ 3 billion, and 30-year bonds worth $ 4 billion, according to Bloomberg News.

Economically, the purchase of a government bond refers to a loan provided by the buyer to the government for an agreed period of time.

More than 180 SMEs have emerged from the UAE market since the beginning of 2017, due to the expected consequences and losses after the introduction of VAT in the UAE at the beginning of 2018.

The political volatility experienced by the UAE directly affected the investment in this country, which contributed to the reluctance of the owners of capital to work and seek a safe haven.

The growing international outrage over the UAE’s arrest of foreigners has blocked the Gulf’s brilliant economic ambition and caused international companies and businessmen to refrain from going there.

Experts in the Gulf economy say that salaries of employees are falling in the UAE and property prices are falling, profits of companies and retailers have fallen, and the number of tourists is little or worse.

Meanwhile, the UAE government debt has risen from 15% of GDP to 20%, according to the British newspaper.