23 March 2020
As you are aware, the coronavirus outbreak has now affected almost every country around the world. From an economic standpoint, the impact of coronavirus has resulted in a period of significant uncertainty and volatility. It is highly likely that economic growth will slow down in the coming months. Given the prevailing environment, the Aga Khan Economic Planning Board (AKEPB) for UAE would like to apprise the Jamat of the following:
- Avoid all unnecessary expenses at this time and monitor what you spend against what you earn; plan your expenses in a way that you increase your savings every month.
- Avoid making new commitments until the economic outlook is clearer.
- Speak to your landlord and seek rent waivers (1 to 3 months); where renewals are due, negotiate on contracts.
- Ensure important documents such as wills, powers of attorney, insurance and medical papers are up to date and accessible.
- Having health insurance could be critical in the weeks ahead. We advise you to ensure you have adequate coverage for yourselves and your dependents.
- Maintain savings as a financial cushion against unexpected job or business loss. Now is a good time for families to create budgets if they do not have one, or review existing budgets to plan for the coming months.
- The UAE government announced on 21 March 2020 some economic measures through the local commercial banks for customers. For details, please refer to the following link: Dubai banks announce business relief package for customers as part of support for UAE economy
- Read newspapers regularly to be aware of the continuously changing local, regional and global environment.
- School breaks could be extended further if the pandemic worsens. Working parents should explore options that would allow you to continue working from home.
- Be cautious before making any short-term and speculative investments.
- As the pandemic spreads globally, consumer sentiment may weaken further. Those involved in sectors such as travel, hospitality, retail and F&B should prepare for reduced demand for their services for the foreseeable future.
- Business owners should focus on cashflow as a priority and be financially prudent.
- Speak to your landlord and seeks some rent waivers (1 to 3 months).
- Call all suppliers and see if they will accept more flexible payment terms.
- Speak to your bank to discuss your circumstances and see if they will be more accommodating on loans given the current economic situation and regional stimuli in place. On 21 March 2020, the UAE government announced some economic measures through the local commercial banks for businesses. For details please refer to the following link: Dubai banks announce business relief package for customers as part of support for UAE economy
- Lower interest rates could constitute favourable news for those carrying debt on lines of credit, mortgages and floating rate loans. It will help ease the interest burden. Please speak to your bank to ensure that you are taking advantage of this.
- Products from abroad may experience supply shortages and higher prices. If you are involved in trade, please consider disruptions in supplies and if possible, explore diversifying suppliers.
AKEPB is monitoring the situation closely and will continue to keep the Jamat informed of any further developments.