Rising dollar a major concern for CEOs in UAE, says KPMG

dubai — Strength of the US dollar is a one of the biggest concern for the chief executives of the UAEbased companies as it affects some of the key sectors of the country, according to global consultancy KPMG analysts.

“The dollar has strengthened 10 per cent year-on-year and in bound economies like UAE, which is very reliant on tourist numbers, trade and FDI, it has a very direct impact on it. We think almost 50 per cent of GDP is dependent on dollar because if you think aspects of hospitality, retail etc., everything becomes expensive for tourists,” said Vikas Papriwal, partner, head of advisory, KPMG Lower Gulf.

Due to its pegging, the dirham gains and loses in line with the fluctuation of the US dollar, hence, it increases and decreased the buying power of the foreign tourists coming into the UAE.

He also pointed that the contracting sector is also feeling pressure as big foreign players are branching into the GCC countries.“For contracting sector, liquidity has been a challenge over a period of time. Big contracting companies from the UK and China are coming are coming out of these market, clearly putting more pressure on locally-based contract companies,” Papriwal said during the launch of KPMG CEO outlook report on Monday. The KPMG survey results showed that CEOs in the UAE are now less optimistic about the country’s 3-year growth prospects. Around 52 per cent respondents have shown confidence in the local economy this year as compared to 72 per cent year.

Papriwal said the CEO are feeling positive despite headwinds is due to the fact that the government listens and as a result the new regulations wer announced about full ownership and long-term visa.

“Those kind of regulations where government is reacting and responding augur well within the CEO community.”

Nader Haffar, CEO, KPMG Lower Gulf, said the fourth edition of the survey finds that chief executives are generally optimistic about the economy and the growth opportunities that disruption and transformation offer.

“At the same time, they are working to address their exposure to a few headwinds, including driving growth from new digital business models and revenue streams. Achieving growth will require CEOs to combine equal measures of resourcefulness with realism, while being open to new thinking, acquiring more skills and challenging convention.”

Achieving growth will require CEOs to combine equal measures of resourcefulness with realism

Nader Haffar, CEO, KPMG Lower Gulf