Offlate there has been a flurry of articles in the media about the increasing inflation, and the rapid rise in the cost of living.
I cannot but stop to think that given Oil at $140 a barrell, with imported food inflation, and that the UAE Dirham remains pegged to the dollar – how people expected the situation to be any different ?
Kershaw Leonard has taken out an exhaustive 70 page report about the galloping cost of living in Dubai and makes for very informative reading. Please see this at https://www.tarmactms.com/.
I would however like to dwell on recent developments which can lead to some very interesting conclusions,
* The UAE has formally announced that Value Added Tax (VAT) will be implemented next year (2020)
* As soon as folks left for their Summer vacations (which is an annual migration of possibly half of Dubai’s population trying to escape near-50-degree temperatures) – Salik toll gates have been put up near the Business Bay and on Maktoum Road – key arterial routes into and out of Dubai city center
* The entire cost structure and visa regime pricing for visit visas has been changed so that an old visit visa for 2 months which used to cost AED 260 will now cost AED 1000 for 3 months. The types of visas now possible has increased but so has complexity and constraints in the criteria for applying for one and the visas have definitely become 100-300% more expensive.
* On the last day before the summer vacations began – one of the most prominent school business groups (which owns more than 16 different schools in Dubai) announced an increase of 125% in the cost of the school transportation fees
* The Dubai Municipality has clamped down on sharing of vilas between familiies ostensibly because it puts pressure on the infrastructure
I cannot help but imagine why Government and large institutions are taking steps that will help the rate of inflation upwards at a time when they really should be looking to control the run in pricing.
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