A worsening economic crisis in the United Arab Emirates is growing as official data showed the UAE’s foreign assets fell 2.1 percent in July on a monthly basis.
According to central bank data, the bank’s assets fell to 369.3 billion dirhams ($ 100.6 billion) in July 2019. Assets stood at 377.24 billion dirhams ($ 102.7 billion) in June.
Year on year, the bank’s assets rose 11.5 percent from 332.31 billion dirhams ($ 90.48 billion) in July 2018. The UAE central bank revised the figures and recalculated historical data as of June 2015, excluding Dubai government denominated bonds in hard currency.
Market indices in Dubai continue to decline. The Dubai Financial Market closed on Thursday, down 0.79 percent at 2769 points. The shares of 14 companies out of 36 companies traded today, while shares fell 15 companies, 7 remained unchanged.
On the other hand, Abu Dhabi Securities Market closed today, up 0.42 percent at 5,062 points.
The UAE is facing financial pressures due to the decline in oil prices and political conflicts, which has harmed the investment climate in the country and its attractiveness in key sectors such as real estate, tourism, and banks, most notably real estate.
In return, the ruling regime in the state-imposed more taxes on citizens and expatriates.
On Wednesday, the regime announced a 100 percent “selective” tax on electronic smoking products and 50 percent on sweetened beverages from January 1, 2020, the official Emirates News Agency reported.
A recent report by the US-based economic research organization Recaro showed that the UAE’s national share fell 3.5 percent in a row to $ 67,000 a year.
Recaro’s rating is based on the latest data from the International Monetary Fund and the World Bank for each country’s GDP calculations, based on a number of indicators in the country, including local currency exchange rates, purchasing power, and inflation.
The report pointed out that the decline of the citizen’s share of GDP in the UAE due to high inflation rates, in addition to the increase in fees and prices of services added by the government, during the past year and early this year, which led to a decline in the purchasing power of the UAE currency and a decline in the share of citizen GDP
The Dubai bourse posted the biggest decline in the Gulf region, tumbling more than 24 percent, according to specialist monitoring in January.
Meanwhile, recent data from the Statistical Center for the Gulf States showed that the inflation rate in the GCC countries rose by 3.7% in December last year.
According to figures issued by the Center, Saudi Arabia’s contribution constituted 2.4% of the total Gulf inflation, followed by the UAE by 1%, then Kuwait by 0.1%, while the contribution of Oman, Qatar, and Bahrain recorded less than 0.1%.
Statistical data on the labor market in the Gulf reveals that the UAE suffers from high unemployment. Unemployment rates for young people, aged between 19 and 25, is about 24%.
The regime’s foreign sabotage policies are driving the country’s overall economic collapse, which is paying billions of dollars a month in foreign wars in Yemen, Egypt and Libya and its criminal plots in the Horn of Africa, Morocco and even Eastern Europe.
This comes in light of the escalation of the imposition of the UAE tax system, especially the value-added tax, which raised inflation last year significantly and causes the collapse of the economy of citizens and residents.
In the UAE, demands for the abolition of value-added tax are on the rise as a result of its danger to the economy and its impact.
The value-added tax has increased consumer distrust and more than half cut costs due to value-added, according to a new study.
The Yallacompare Consumer Confidence Index said that based on a survey of 1,347 UAE residents, 41.2 percent were less confident about their financial health than they were at this time last year for the second quarter.
The study found that 13.9% of UAE residents are now struggling to make ends meet as a result of higher costs associated with introducing the value-added tax in the UAE, compared with 11.9% in the first quarter.
In the second quarter, the study said that 52.2% had to cut spending as a result of the introduction of VAT, compared with 58.3% who said the same in the first quarter.
The index found that only 22.8% were more likely to leave the UAE (24.4% in the first quarter) and 41.5% less likely to leave (42.2% in the first quarter).
The survey also found that nearly 35% of respondents reported an increase in their salaries over the past 12 months, and overall job confidence rose 4.4 percent from the previous quarter.