Tuesday, 02 December 2008
updated 1 minute ago
22:12 UAE time

YOUR DIRECTORY /

Consumer loans in UAE soar by 46%

by This email address is being protected from spam bots, you need Javascript enabled to view it on Sunday, 31 August 2008

SHARP RISE: Consumer loans are up 46 percent in the first six months of 2008, compared to same period last year. (Getty Images)

Consumer loans in the UAE surged 46 percent in the year to June to $14.71 billion, central bank data showed on Sunday, as the Gulf state struggles to contain inflation.

Outstanding loans to individuals living in the second-largest Arab economy at the end of June 2007 amounted to $10.7 billion, the central bank said in a statement on its website.

Personal loans in UAE, home to 4.5 million people, surged almost 40 percent in 2007 and they have almost doubled in the last four years.

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The figures come just days after a survey in the GCC by Bayt.com which revealed that customer confidence in the UAE had dropped dramatically.

And an online poll by Arabian Business over the weekend suggested 80 percent of respondents were pessimistic about the future of their own financial position, amid rising costs of housing and food.

Meanwhile, inflation in the world's fifth-largest oil exporter hit an at-least 20-year high of 10.1 percent in 2007.

Like most of its neighbours in the Gulf region, the UAE keeps interest rates low because it tracks US monetary policy.

This has pushed real interest rates - the official rate minus inflation - into negative territory, and spurred demand for credit.

Total bank assets advanced to $389 million in the second quarter, the central bank added. (Reuters)

UAE consumer confidence drops dramatically
Survey reveals emirates residents have most negative outlook in the Gulf region.

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