UAE’s mid-sized businesses must gear up to face ‘potentially’ choppy conditions

UAE’s mid-sized businesses must gear up to face ‘potentially’ choppy conditions

While higher oil revenues and the government’s agile leadership and response to economic severities have allowed businesses in the UAE to withstand financial shocks, outperforming many of their global peers, the country’s mid-market firms are however not invulnerable to external market challenges, Mashreq Bank noted in its latest report.

Macroeconomic challenges including inflation, rising interest rates and supply chain delays are impacting already thin profit margins.

“The fact of the matter is that there are headwinds. We cannot deny or ignore this,” said Hind Eisa Salim, Executive Vice President and Head of Services and Manufacturing at Mashreq Bank, in the report titled "Growth Outlook Subject to Economic Uncertainties".

“Businesses in the UAE are blessed by the swift measures taken by the authorities since the Covid-19 pandemic. But the UAE’s economy and its source markets are global, and external issues will ultimately affect businesses,” she added.

Uncertainties over raw materials

The bank noted that uncertainty continues to surround the sourcing of raw materials from China. The nation’s zero-Covid policy and resulting lockdowns have stifled economy activity, with effects reverberating across global supply chains.

“It’s hard to predict how the Chinese market will shape up in the coming year – will they take more aggressive action and limit