The Aga Khan Economic Planning Board for the United Arab Emirates (AKEPB) is pleased to present an economic update, offering valuable insights and recommendations to help the Community navigate the evolving economic landscape.
Global and Regional Economic Outlook
The global economy was projected to grow by 3.2% in 2024 increasing to 3.3% in 2025. While growth in the United States is expected to slow, Europe and emerging economies are expected to perform better. In the Gulf Cooperation Council (GCC) region, economic growth is slightly slower in 2024, impacted by contractions in the oil sector.
With interest rate cuts initiated by the U.S. Federal Reserve in 2024, further cuts are expected during 2025. The GCC countries, are positioned to mirror these cuts, which will help reduce financing costs and improve liquidity.
In the years ahead, sectors that will see strong growth in the UAE include aviation, renewable energy, logistics, finance, infrastructure and technology (including Artificial Intelligence commonly known as AI. Exploring opportunities in these sectors could be beneficial.
Incorporating sustainability and Environmental, Social and Governance (ESG), considerations, into business decisions, is becoming essential for long-term success. Not only does it strengthen resilience and reduce risk, but also aligns with evolving consumer expectations and regulatory trends. Embracing these practices can drive innovation, attract responsible investment, and create a positive impact on both society and the environment.
Recommendations for Individuals
As the cost of living continues to rise globally and within our cities, the UAE, in particular, has become a popular destination for people seeking better economic opportunities. However, this has led to the cost of key necessities, such as housing, food and education, outpacing income growth. The following are some recommendations for future planning:
Financial Security
- Create a budget: Before it is too late track and manage monthly expenses to avoid overspending.
- Build an emergency fund: before sending funds to your home country for your family, it is essential to have an emergency fund that can cover at least six months of expenses, in case of an unexpected loss of income.
- Avoid debt pitfalls: Also, be mindful of debt. Credit card debt, in particular, is expensive and defaults severely damages your credit score. It is not advisable to use credit cards to fund your lifestyle or daily expenses. Budget carefully and plan your expenses to avoid living beyond your means.
- Beware of scams: With the dramatic rise of financial scams, it is important to stay vigilant. Never share your personal or banking information over the phone or with strangers.
Enhancing Employment Prospects
- The job market is becoming increasingly competitive, with employers having access to a larger talent pool. Therefore, staying ahead through continuous learning and upskilling is recommended as follows:
- Whether you are a senior executive, a recent graduate, or a manual worker, it is critical that you continue to improve your job skills and technical knowledge
- The fast adoption of AI at workplaces, means these areas will likely have high demand and one must explore upskilling in this sooner than later
- Brush up on your English language skills. Residing in the GCC region, it is also important to learn the Arabic language
- For residents of the UAE, it is also recommended to take advantage of the Involuntary Loss of Employment insurance scheme. This government initiative provides financial support in case of job loss, and it is strongly recommended to enroll.
Recommendations for Business Owners
- For business owners, it is imperative to strictly adhere to local laws, especially when it comes to financial and asset-related transactions. Failure to adhere to legal and regulatory requirements, can have serious financial and reputational consequences.
- With the GCC countries continuing to evolve their tax regimes, it is important for business owners and investors to stay informed about the latest developments in this area.
- Another key point is localization. Many GCC countries now mandate the hiring of Citizens by law. Failure to comply can result in heavy fines. It is important that our community's businesses comply with these requirements.
The above changes, along with ongoing developments, may increase business expenses. To manage this, maintaining a lean cost structure and paying close attention to cash flow management would be prudent.
Leveraging Community Resources
AKEPB encourages the Community to utilize the time and knowledge resources designed to foster collaboration and growth which are available to support you personally, professionally, and in your business endeavours.
One key resource is the Alliances Vertical. Alliances are networks of like-minded professionals working in same or similar sectors. They provide opportunities for professionals and business persons to connect, share knowledge, and collaborate. With over 900 members in the GCC, there are currently eight alliances which include:
- Finance
- Healthcare
- Real Estate
- Marketing and Events
- Education and Training
- IT
- Construction and Engineering
- Food & Beverage
If you are a business owner or a professional, please consider joining a sector-specific Alliance.
Another Key resource of leverage is the Ismaili Business Networking Group (IBNG). The IBNG enables Community Members to expand their footprint with Community Membership from the GCC, India, Pakistan, Uganda, Congo, New Zealand, and Australia.
Throughout our history, the Community has thrived on collaboration, which continues presently through the sharing of job opportunities, market intelligence, and business connections.
Additionally, several UAE businesses have partnered with AKEPB to provide exclusive discounts to the Community. These include discounts from Aster hospitals, various clinics and pharmacies, travel, fitness, photography and catering establishments. Moreover, discounts from the Pakistan Medical Centre and various additional businesses in the services sector will be added in due course. Community members can access these discounts through The.Ismaili app under Community Discounts. Community business owners who wish to offer discounts can do so by registering with AKEPB.
In Conclusion
To navigate the current economic landscape, the Jamat is encouraged to:
- Prioritise financial prudence in households and businesses.
- Continuously develop skills to remain competitive in the workforce.
- Leverage available community resources and networks.
AKEPB will continue to monitor the economic environment and provide updates and guidance.
For additional support, please contact AKEPB team on [email protected]
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