Consumer loans surge $1.36bn during Q1

BORROWING BOOM: Consumer loans in the UAE surged $1.36 billion during the first quarter, according to the central bank. (Getty Images)

Consumer loans in the UAE rose around 5 billion dirhams ($1.36 billion) in the first quarter of 2008 from the end of last year, as the second-largest Arab economy struggles to contain inflation.

Central bank data showed on Saturday that consumer loans reached 48.41 billion dirhams in the first three months of the year from 43.46 billion at the end of last year, but did not give a comparative figure for the first quarter of last year.

Total bank assets advanced to 1.34 trillion dirhams in the first quarter, up from 1.23 trillion at the end of last year, the central bank said on its website.

Loans to individuals in the world's fifth-largest oil exporter surged almost 40 percent in 2007. They have almost doubled over the last four years, during which time oil prices have surged, helping drive economic growth and borrowing.

Like its Gulf Arab peers - bar Kuwait - the UAE pegs its dirham to the greenback, forcing it to track US monetary policy at a time when the US Federal Reserve is cutting interest rates while its economy is booming, fuelling inflation.

UAE inflation jumped to 11.1 percent in 2007, the highest for at least 20 years, steered by soaring rents. (Reuters)

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