Actions to take now to counter inflation

Actions to take now to counter inflation

Inflation has become a hot topic. While the UAE and other GCC countries have not experienced the surge in prices being witnessed in other parts of the world, this region is not immune to inflationary pressures. Businesses of all sizes are feeling the pressure of increasing inflation rates, but how did we get here? And what action can businesses take to mitigate inflationary risks?

According to the International Monetary Fund, inflation in the UAE is expected to be at 3.7 per cent in 2022, falling to 2.8 per cent in 2023. Contributing factors to increasing inflation in the region include geopolitical tensions, high energy costs, supply chain disruptions and the rise in consumption taxes in some GCC countries. While the UAE's inflation rate is one of the lowest globally, businesses operating in the emirates are still feeling the sting of increasing costs.

UAE-based and international businesses are facing supply chain disruptions as energy and raw material prices continue to rise and organisations seek to source materials at lower costs. These supply chain shortages can lead to delays in production and delivery, impacting revenue and profitability. For some businesses, decreased consumer spending has affected revenue, as fewer products are being sold. Higher inflation