Daily Personal Finance Insights – Population explosion
Arab population to double by 2050
The Arab population today numbers 400 million, which will double to 800 million by 2050 according to the IMF. The IMF indicates this population growth makes: “aggressive economic growth an urgent imperative. Even to tread water and maintain current living standards, the Arab economies would need to grow at “tiger-economy” rates of 9 to 10% for a decade or more. That is a daunting task, one the public sector cannot accomplish alone. Growth must come from the private sector, and that requires reform of the economy: removing regulations, relaxing government control, promoting trade, and bolstering the rule of law.”
Lowest income growth
The region has the lowest per capita income growth according to the IMF. Aon Hewitt has forecast that salary increases in the UAE will average 5.3% in 2013. However inflation is likely to be between 3 to 4%, indicating a very nominal increase in salary in real terms.
GCC best for bank stability
A study by Laeven and Valencia (2012) identifies systemic banking crises throughout the world as events during which widespread bank runs, bank losses, or liquidations combine with large-scale crisis intervention measures. Their analysis reveals a strikingly low frequency of banking crises in MENA countries throughout the past four decades. The GCC countries recorded the lowest number of banking crises of all countries studied as reported by the IMF in their Finance and Development studies.
UAE bourse’s market cap grows by US$ 4.1 billion
The UAE bourses emerged as the star performers in the Arab world in the first few weeks of 2013, with the markets of Abu Dhabi and Dubai gaining more than US$ 4 billion. Figures released by the Abu Dhabi-based Arab Monetary Fund (AMF) showed that only the markets of Abu Dhabi, Dubai, Saudi Arabia and Oman have recorded increases in capitalization since the start of 2013 but the bulk of the growth was in the UAE.
Abu Dhabi Securities Exchange recorded the biggest rise in the region, with its market capitalization surging from around US$ 82.7 billion at the start of 2013 to US$ 86.1 billion on Sunday 10th March. Dubai's market capitalization grew from about US$ 55.9 billion to US$ 57.6 billion in the same period.
Dubai government debt caution says Moody’s
Ratings agency Moody's Investors Service has released a new report urging caution due to Government debt. The report titled: Dubai Corporates: Modest Economic Growth Benefits Corporate Credit Quality, But 2014 Debt Wall Loom,
2014 will be a pivotal year for Dubai as US$ 20 billion of direct government debt related to Dubai World becomes due. Although the Abu Dhabi government and Abu Dhabi government-related issuers (GRIs) are the lenders to the government of Dubai, the report says it will be constructive for the overall environment when clarity emerges as to how these maturities will be addressed though market expectations that they will be extended are a natural assumption. It also stated little progress has been made on clarifying and strengthening the legal framework for insolvencies/debt restructuring, while details of the Dubai government’s capacity to support its GRI’s remain uncertain.