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UAE debt runaway cases up 200% in 2016

UAE debt runaway cases up 200% in 2016

A total of 814 runaway cases were recorded in the emirates by the end of Q4, according to Coface

The number of cases of UAE businessman running away with unpaid debts increased 200 per cent from Q3 2015 to Q4 2016, according to trade credit firm Coface.

In a GCC economies report, the firm said a total of 814 runaway cases were seen in the emirates of 23,000 companies monitored across the UAE and Saudi Arabia.

The firm also noted a 4 per cent rise in the delay of payments in the UAE due to a lack of bank lending, led by a 26 per cent increase from metal traders, building materials and construction firms and 22 per cent increase in the general trading sector.

The firm forecast UAE GDP growth would rise from 2.3 per cent in 2016 to 2.5 per cent in 2017.

“The UAE has remained relatively resilient in the face of lower hydrocarbon prices because of its economic diversity, but the lower oil revenues left government spending constrained and this had a spillover effect on all economic activities. The slight rise in oil prices now should give a corresponding impetus to the UAE economy,” said Massimo Falcioni, CEO of Middle East Countries at Coface.

He said Abu Dhabi would continue to see a slowdown this year due to its dependence on oil activity, while Dubai would be more resilient.

“Overall, the country’s growth will be driven by the tourism and financial sectors, while difficulties in the construction sector will remain,” Falcioni said.

Elsewhere, Coface said growth would increase from 1.3 per cent to 1.8 per cent in Saudi Arabia, 2.6 per cent to 3.3 per cent in Qatar and 2.4 per cent to 2.6 per cent in Kuwait.

Growth in Bahrain and Oman was forecast to drop from 2.0 per cent to 1.7 per cent and 1.8 per cent to 1.7 per cent respectively.

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