2015 is almost over and it’s time to review how this year’s big headlines affected your finances. The UAE market has seen its fair share of ups and downs over the last one year. What were the major changes in UAE’s economy and regulations in 2015? Over the course of the year gone by, there were a few headlines which affected personal finances of UAE residents. Below is a list of such major events that took place in 2015.
Subsidies on fuel prices
For the first time in the UAE, the Ministry of Energy announced fuel prices to be deregulated starting from August 2015. Over the years residents had enjoyed low fuel rates but as of 1st August the prices were to be linked with global prices. The first change was an astounding increase of 24% which was a matter of concern for all residents. Along with fuel prices many suspected an increase in general commodities’ prices, but fortunately that did not happen. There was a drop in fuel prices in the following months following a global trend but it still remains uncertain if they would rise again.
If you wish to save fuel and safeguard yourself in the future, you can follow some easy fuel saving tips. Simple solutions such as using public transport and maintaining your vehicle’s engine can eventually help you cut down on excess fuel expenditure.
Rise in cab fares
There is a noticeable increase in taxi fare every year. This year there was an increase of 5% in Dubai taxi fares which was announced by RTA in November. RTA claims this the increase is made with an aim to improve services and facilities which are provided to the public. The change in taxi fares might be subject to change again which will be determined by fuel price. The increase is not noticeable but can affect monthly budgets of regular taxi users.
If this increase is causing a dent in your budget, you can consider using other modes of transport offered by RTA. Buses and metros cost much less compared to taxis, approximately 1/6th for the same distance covered.
After the first quarter of 2015, there was an increase of 5.7% in rents for three bedroom apartments and 3.3% increase for one bedroom apartments on average in the UAE. The main reason behind this rise is due to increase in demand for rental property in the UAE. Landlords are reluctant to reduce the rent as there are other tenants ready to pay the asked amount. Therefore, many residents have moved to a cheaper location which is within their budget.
Potential hike in interest rates
UAE’s Central Bank has increased its key policy rate by 0.25% which was triggered by an increase in short term interest rates by the US Federal Reserve. This rate hike could result in banks increasing rates for certain products and applicant categories which could make borrowing even more expensive for riskier borrowers, SMEs and unlisted companies’ employees. Credible borrowers have an advantage as banks are competing for prime borrowers in the market. Predicted increase is an estimate of 0.5% but remains uncertain when and at what scale this will affect the market.