The picture is much improved these days in terms of economic sentiment compared to last August when the concerns for the outlook were dominated by the potential impact of inflation and the war in Ukraine.
For example, in Dubai’s non-oil private sector, data indicates employment activity increased in June for the fourteenth successive month, recording the longest run of continuous job creation in over six years.
The S&P Global purchasing managers' survey shows recruitment was “notably robust” among construction firms, the most optimistic sector.
Demand rose for the 21st successive month in June and business conditions continue to expand, supported by robust retail, travel and tourism industries. In fact, the pace of growth seems to have picked up mid-way through 2023.
That’s despite the rate of inflation being higher than central bankers want it to be.
On Wednesday, the latest figures show consumer prices in the US fell to their lowest rate of growth since March 2021. The consumer price index (CPI) rose 3 per cent year-on-year in June, down from 4 per cent in May, data released by the Labour Department on Wednesday showed. The level of 3 per cent remains above what policymakers want and is regarded as costly because it erodes people’s savings and distorts supply and demand dynamics.
Business conditions continue to expand, supported by robust retail, travel and tourism industries
The Federal Reserve has raised interest rates 10 times over the last 15 months to bring down inflation towards its 2 per cent objective. However, influential economist Charles Goodhart thinks the current level of inflation will settle at about 3 per cent to 4 per cent and remain there for decades. This trend will be driven by persistent labour shortages in major economies like the US that will eventually be managed by automation and AI.
We are effectively living with the consequences of expansive monetary and fiscal policies over the past 14 years. We should not necessarily be overly worried by the idea of higher inflation becoming a fixture. There seems to be the counter force of resilient economic growth despite the higher interest rates.
In the UAE for example, the economy has recovered sharply from the Covid-induced slowdown on the back of higher oil prices and measures to mitigate the effects of the pandemic such as allowing higher levels of foreign ownership. There is a not dissimilar picture in the world’s largest economy. Writing in the New York Times this week, Nobel Prize-winning economist Paul Krugman wrote of the US economy: “I can’t think of another example in which there was such a universal consensus that recession was imminent, yet the predicted recession failed to arrive.”
We had all been sure that the Fed’s policy of raising rates would trigger a sharp slowdown but that has not materialised. There is evidence to suggest our certainty might be somewhat misplaced.
Economic theory and research does not subscribe to the idea that high inflation will always be costly. It is more a psychology at work. Most of us know our history – a century ago hyperinflation destroyed Weimar Germany and more recently it wreaked havoc in Zimbabwe under Robert Mugabe.
We always worry inflation will make us poorer in real terms. Governments know this anxiety is real. So do central bankers. No one wants to be seen to be allowing inflation to run its course unchecked.
But in an era when populism has proved irresistible to both voters and those running for office, policies that target both our conscious and unconscious fears should be treated with a degree of scepticism.
Although major central banks are officially independent, they are not immune to public opinion. In the wake of the financial crisis, central bankers became unpopular when things did not go well for people, regardless of where the responsibility actually lay. Not being political can make you an easy target in fact.
Much like the push for austerity in the UK disguised some of the ruling Conservative Party’s political aims – to the wider cost of health and other services as we see now – so the obsession with being seen to be stridently taming inflation should be observed with a cold eye.
We can, in fact, live with inflation at current levels, especially if business conditions remain strong, and while central banks should always be working on mitigating any pain for the financial system, they do not have a solution to the many realities and challengers we are facing, including the impact of climate change, the deployment of AI and shifting demographics.
The good news for the economic outlook has to be that there is still good news. We should make sure that we don’t undermine such fortune in order to over compensate on inflation – something that at the current level is potentially worse in our minds than in practice.
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
The specs
BMW M8 Competition Coupe
Engine 4.4-litre twin-turbo V8
Power 625hp at 6,000rpm
Torque 750Nm from 1,800-5,800rpm
Gearbox Eight-speed paddleshift auto
Acceleration 0-100kph in 3.2 sec
Top speed 305kph
Fuel economy, combined 10.6L / 100km
Price from Dh700,000 (estimate)
On sale Jan/Feb 2020
MATCH INFO
Arsenal 1 (Aubameyang 12’) Liverpool 1 (Minamino 73’)
Arsenal win 5-4 on penalties
Man of the Match: Ainsley Maitland-Niles (Arsenal)
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
UAE WARRIORS RESULTS
Featherweight
Azouz Anwar (EGY) beat Marcelo Pontes (BRA)
TKO round 2
Catchweight 90kg
Moustafa Rashid Nada (KSA) beat Imad Al Howayeck (LEB)
Split points decision
Welterweight
Gimbat Ismailov (RUS) beat Mohammed Al Khatib (JOR)
TKO round 1
Flyweight (women)
Lucie Bertaud (FRA) beat Kelig Pinson (BEL)
Unanimous points decision
Lightweight
Alexandru Chitoran (ROU) beat Regelo Enumerables Jr (PHI)
TKO round 1
Catchweight 100kg
Marc Vleiger (NED) beat Mohamed Ali (EGY)
Rear neck choke round 1
Featherweight
James Bishop (NZ) beat Mark Valerio (PHI)
TKO round 2
Welterweight
Abdelghani Saber (EGY) beat Gerson Carvalho (BRA)
TKO round 1
Middleweight
Bakhtiyar Abbasov (AZE) beat Igor Litoshik (BLR)
Unanimous points decision
Bantamweight
Fabio Mello (BRA) beat Mark Alcoba (PHI)
Unanimous points decision
Welterweight
Ahmed Labban (LEB) v Magomedsultan Magomedsultanov (RUS)
TKO round 1
Bantamweight
Trent Girdham (AUS) beat Jayson Margallo (PHI)
TKO round 3
Lightweight
Usman Nurmagomedov (RUS) beat Roman Golovinov (UKR)
TKO round 1
Middleweight
Tarek Suleiman (SYR) beat Steve Kennedy (AUS)
Submission round 2
Lightweight
Dan Moret (USA) v Anton Kuivanen (FIN)
TKO round 2
UAE currency: the story behind the money in your pockets
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Lampedusa: Gateway to Europe
Pietro Bartolo and Lidia Tilotta
Quercus
Mohammed bin Zayed Majlis
Tom Fletcher on 'soft power'
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Dark Souls: Remastered
Developer: From Software (remaster by QLOC)
Publisher: Namco Bandai
Price: Dh199
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Gothia Cup 2025
4,872 matches
1,942 teams
116 pitches
76 nations
26 UAE teams
15 Lebanese teams
2 Kuwaiti teams
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
Killing of Qassem Suleimani
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Bawaal%20
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COMPANY PROFILE
Name: Rain Management
Year started: 2017
Based: Bahrain
Employees: 100-120
Amount raised: $2.5m from BitMex Ventures and Blockwater. Another $6m raised from MEVP, Coinbase, Vision Ventures, CMT, Jimco and DIFC Fintech Fund
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The bio
Job: Coder, website designer and chief executive, Trinet solutions
School: Year 8 pupil at Elite English School in Abu Hail, Deira
Role Models: Mark Zuckerberg and Elon Musk
Dream City: San Francisco
Hometown: Dubai
City of birth: Thiruvilla, Kerala
Difference between fractional ownership and timeshare
Although similar in its appearance, the concept of a fractional title deed is unlike that of a timeshare, which usually involves multiple investors buying “time” in a property whereby the owner has the right to occupation for a specified period of time in any year, as opposed to the actual real estate, said John Peacock, Head of Indirect Tax and Conveyancing, BSA Ahmad Bin Hezeem & Associates, a law firm.
6 UNDERGROUND
Director: Michael Bay
Stars: Ryan Reynolds, Adria Arjona, Dave Franco
2.5 / 5 stars
THE SPECS
Engine: 3.9-litre twin-turbo V8
Transmission: seven-speed dual clutch
Power: 710bhp
Torque: 770Nm
Speed: 0-100km/h 2.9 seconds
Top Speed: 340km/h
Price: Dh1,000,885
On sale: now
Learn more about Qasr Al Hosn
In 2013, The National's History Project went beyond the walls to see what life was like living in Abu Dhabi's fabled fort:
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
RESULTS
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European arms
Known EU weapons transfers to Ukraine since the war began: Germany 1,000 anti-tank weapons and 500 Stinger surface-to-air missiles. Luxembourg 100 NLAW anti-tank weapons, jeeps and 15 military tents as well as air transport capacity. Belgium 2,000 machine guns, 3,800 tons of fuel. Netherlands 200 Stinger missiles. Poland 100 mortars, 8 drones, Javelin anti-tank weapons, Grot assault rifles, munitions. Slovakia 12,000 pieces of artillery ammunition, 10 million litres of fuel, 2.4 million litres of aviation fuel and 2 Bozena de-mining systems. Estonia Javelin anti-tank weapons. Latvia Stinger surface to air missiles. Czech Republic machine guns, assault rifles, other light weapons and ammunition worth $8.57 million.
