Will the cost of living in the UAE keep getting higher than it currently is?

Oluwafemi Smith
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1.1K Views
Jul 22, 2022

While the war between Ukraine and Russia may appear far away to some people, it gets clearer with each passing day that the world is a global village, and what affects country A will sooner or later affect country B, if not all.

The UAE [United Arab Emirates] until now has been known for its high cost of living, especially with its accommodation, which gradually rose to become an acceptable norm.

In recent developments around the world, from grain production and fertilizer, down to oil, we have seen different views that have thrown major players in the economy off guard, and companies have found reasons to either review their processes or risk the chance of going extinct.

In this post, I will be addressing the current state of money play and exchange as seen in the UAE and why the people of the UAE have not been doing much spending in recent times.

By the way, this article has been made possible by The Watchtower-Web Design Agency Dubai.

Are things more expensive in the UAE now?

In the UAE recently, it has been observed that the cost of living has unreasonably gone up, even beyond what was seen last year.

This has been due to the recent rise in inflation, which is a global concern, not just in the UAE but also in developed countries.

It is observed that over 83% of its citizens are currently finding it difficult to fend for themselves as they ought to. Hence, they have devised a sane means to cut back on their expenses.

While some have considered cutting back costs on food, others have chosen to reduce their budget on clothing.

So, to answer the question in everyone’s mouth, things are more expensive everywhere now, and the UAE is no exception to this whirlwind.

Will the cost of living in the UAE get better than it currently is?

According to trends, it was seen that there was a rise in inflation from 5.7% in 2021 to around 7.5% in 2022. If all indications served right, it is projected that there would be an increase in Arab nations.

While some citizens are hopeful despite the high expenditures, 39% of locals believe their financial condition will improve in the future, compared to about 21% who believe it will get worse and 27% who believe it will stay the same.

The Arab Economic Outlook Report also states that a relative decrease in inflation is anticipated in 2023, when it is projected to reach 7%. Until then, everyone is advised to brace up, unless something else happens.

Would the GDP of the UAE experience a downward sweep?

The UAE just recorded an 8.2% increase in its GDP due to the increase in oil production.

It is seen by the regulators that an average production of 2.95 million oil barrels per day is produced, with significant growth in the real non-oil GDP as well.

With the UAE producing an average of 2.95 million oil barrels per day, according to a study by the nation's central bank, it is clear that this volume will significantly boost the GDP.

Despite the continuing rise in inflation, the study indicated positive growth in the nation's non-oil output.

The regulator has projected that the overall GDP will significantly increase by 5.4% and 4.2, respectively, in 2022 and 2023.

In conclusion, the world is currently experiencing a major blow of disunity and war has been the choice. This choice made between both countries and the bodies [NATO] has rippled effects that the world may never be ready for.

This effect has not only caused a slowdown in business processes but has also crippled the free flow of money, business, and ideas.

We won't be quick to blame the war for the high cost of living in the UAE but also call out the aftereffects of the 5th wave of COVID-19.

The Watchtower, a web design agency in Dubai, is a leading name in the business of web design and development in Dubai.