Thursday, September 2, 2010

The UAE economy is set to rebound with “greater confidence”, the prime minister said yesterday, a sentiment reflected in recent surveys of the business community.

“Despite all the negative effects of the crisis, they have proven that our economy is solid and capable of absorbing its various ramifications,” said Sheikh Mohammed bin Rashid Al Maktoum, UAE vice president and prime minister and ruler of Dubai.

Amid doubts that Dubai might default on debt mainly owed by state-linked entities amounting to around $70 billion, Sheikh Mohammed said the UAE’s economy cannot be looked at in fragments.

The news came as Dubai World, a state-owned holding company, told the Bloomberg News Agency it may be able to sell bonds to repay its multi billion dollar loans.

Sheikh Mohammed’s sentiment was reflected in the latest survey released by HSBC, which found that business people across the GCC grew in confidence regarding the outlook for their companies in the third quarter. 

Over a third of respondents predict a growth in revenue over the next three months.

Only 16 per cent expect to see their workforce shrink in the next year, compared to 25 per cent who report job losses in the past year.

An additional survey of employee surveys compiled by Hewitt Associates, a Dubai human resources consulting firm, also reflected the growth confidence and revealed that average salaries are due to increase by 7.9 per cent in the Middle East next year.

The survey of 239 large organisations across Middle East reveals that the number of organisations planning salary freezes is expected to drop from 42 per cent this year to 14 per cent next year.

A similar trend is expected on salary cuts, with the number of organisations planning on salary cuts expected to drop from 5.7 per cent in 2009 to 1.9 per cent next year.

Across the GCC countries surveyed, salary increases are expected to differ next year.

The UAE will see average rises of 6.5 per cent, compared to 5.4 per cent this year.

Egypt is expected to have the biggest salary jumps for employees, with an estimated average rise of 10.4 per cent next year.