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Because of this companies are now struggling to hire skilled labourers as many of those experienced people have already relocated to other markets.
Dr Abdulraman Al Tassan, CEO of RAKAA Properties, whose company is developing two smart technology-equipped towers on Al Reem Island, Abu Dhabi, said:
"The ongoing inflation can be attributed to the economic recovery and the accompanied increasing domestic demand for all products and services. Rising inflation is the biggest challenge and should be addressed by initiatives and strategies to contain this inflation and offset its pressures. The persistent inflation will certainly result in fluctuations in economic activities, and an inevitable economic slowdown. The real estate boom has contributed to the current inflation, as we witnessed a period of unprecedented investment in this sector, the increase in government fees on the construction sector, and the escalating operational costs. All of these factors have reduced the returns for most investors. The impacts of inflation are not limited to the UAE alone, but all the GCC countries. The long-awaited decision on whether to de-peg the GCC currencies from the dollar is one possible effective solution. But this will lead to other complications in trade exchange, customs fees, and the uniform regulations of GCC trade sector".
Al Tassan praised the government initiatives to address the rising inflation, such as the recent 70% salary hike for all federal government employees.
Al Tassan agreed with the call to depeg the Dirham from the dollar, reviewing the current monetary policies, and setting price control inspection authorities.
One suggestion was to spread awareness among people about the necessity reducing consumption of all products, because the bank financing facilities and credits have increased the purchasing power and consequently the rising prices and inflation.
Posted by Eman Hassan
