GCC expatriates hit by financial crisis
Dubai, January 19, 2009
A majority of foreign residents in the UAE said their lifestyle has been compromised by the global financial crisis, a survey showed.
In a survey of 600 residents in the UAE and Bahrain, Zurich International said some 83 per cent of respondents in the UAE expressed concerns about their ability to repay their mortgage and personal loans, according to a report in our sister newspaper Gulf Daily News.
A collapse in oil prices and a property market downturn, particularly in Dubai, have brought to an end an economic boom in the Gulf region, leading many economists to slash their economic growth forecasts.
'Fifty-eight per cent in UAE believe their lifestyle has now been compromised by impact of credit crunch ... only 25pc in Bahrain believe this,' Zurich said.
Banks across the Gulf are restricting lending as they face tight credit markets and Dubai's real estate price correction is leading to scores of job losses, raising the prospect of defaults on mortgage and consumer loans.
'The jitters have set in about job security, practical issues and saving,' Zurich Middle East and Africa chief executive Carlos Sabugueiro said.
'Also, more people are concerned about getting professional financial advice, with around a fifth of expats now turning to professional sources.'
Confidence was higher in Bahrain because 'they haven't been so exposed to the boom-and-bust scenario as in the UAE,' Sabugueiro said.
Some 65pc of Bahrain respondents were currently holding property investments, compared with a lower 27pc in the UAE.
According to the survey, which polled 500 people in the UAE and 100 in Bahrain, 50pc of respondents believed the situation would improve, while an overwhelming 70pc said they would sit out the credit crisis.