UAE’s GDP to Grow by 4.2% in 2014 | Push Digits Chartered Accountants

UAE’s GDP to Grow by 4.2% in 2014

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Euler Hermes is a prominent trade credit insurance provider and one of the main sponsors of the second Annual Trade Insurance Conference which is to be held at Dubai Mall from 27 October to 29 October 2014. Euler Hermes has been working jointly with Alliance Insurance PSC since 2007 in UAE. As per the report issued by Euler Hermes, the Gross Domestic Product (GDP) of UAE is estimated to rise by 4.2% and 4.5% in the current and next year respectively whereas the exports of the UAE are anticipated to rise by 6% in the current year from $379 billion in preceding year benefiting from increase in demand from countries like Singapore, Taiwan, Thailand and India.

Mahan Bolourchi, head of GCC states at Euler Hermes said the economy of UAE (2nd biggest in Arab region) is best diversified one in the region and is experiencing high growth which brings more opportunities but also increases certain market risks like higher number of bad debts, limited financial information and cash flow management problems etc. He added that SMEs specifically face risk because of their restricted liquidity and financial capacity. So to manage their cash flows SMEs need to obtain short term loans at high interest rates.

Bolourchi drew attention towards the significance of trade credit insurance in the economy and said that the failure to collect the receivables can have a disturbing effect on the profits of the company. The incremental sales needed to mitigate loss and keep the profit levels can have negative impact on the future growth of Company. Trade credit insurers help the economy to grow and assist in cash flow management.

The global insolvency index has reduced by 8% during the year as compared to the last year but still it is 13% more as compared to pre crisis situation.

As per a survey conducted for implementation of insolvency rules, more than 70% of the participants voted in favor of having a common financial reporting framework for finance related disclosures. They believe that this will increase the confidence of investors and hence more financing is likely to be generated.


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