Coping with Rising Costs: UAE Residents' Financial Challenges

Rising Costs

As the cost of living in the UAE continues to escalate, residents are facing unprecedented challenges in managing their monthly expenses. From groceries to rents, fuel prices to school fees, the financial burden is mounting. A survey by Cigna Healthcare reveals that nearly half of UAE residents are stressed about the increasing cost of living, highlighting the significant impact on individuals and families.

Grocery Expenses:
Long-time residents like Gorashi Elsheikh, a Sudanese expat, reminisce about the days when a monthly grocery bill of Dh250 sufficed for a family of five. However, today, he finds himself spending between Dh1,500 and Dh2,000 on essential items, including meat, milk powder, chicken, sugar, and fresh juices. Similarly, Ace, a Canadian expat, has had to adjust his shopping habits to accommodate rising grocery costs, opting for more affordable supermarket options to stretch his dirhams further.

Rental Prices:
Ace also reflects on the skyrocketing rental prices in the UAE. What was once an affordable option to rent a spacious villa in Mirdif for Dh20,000 to Dh30,000 per year in 2002, now commands nearly Dh300,000 annually. To avoid the uncertainty of yearly rent increases, Ace opted to purchase his own property, providing stability and control over his living situation.

Fuel Expenses:
The surge in fuel prices has also taken its toll on residents like Shaji Haneef, who now spends over four times more on fuel compared to a decade ago. The deregulation of petrol prices in 2015, coupled with global price increases, has led to a significant increase in monthly fuel expenses for residents like Shaji, impacting their overall budget.

School Fees:
Expat families are grappling with the rising cost of education, with annual school fees increasing by an estimated 3-4 percent annually. Ace now pays almost Dh100,000 per year for his children's education, highlighting the financial strain on families striving to provide quality education for their children.

Utility Bills:
Maria Santos, a long-time resident from the Philippines, notes the substantial increase in utility bills over the years. What was once a monthly electricity bill of around Dh200 in the 1990s has now soared to Dh700 or more. The rising prices of everyday essentials, including utilities, further exacerbate the financial challenges faced by residents.

Impact on Savings:
These escalating costs have significantly impacted residents' ability to save for the future. Ace acknowledges that his expenses have increased by approximately Dh10,000 per month compared to pre-Covid times, leaving a smaller portion available for savings. Similarly, Maria laments the impact on her retirement plans, as the increasing cost of living makes it challenging to save enough for a comfortable retirement in Dubai.

In conclusion, the rising cost of living in the UAE poses significant financial hurdles for residents, impacting their ability to meet monthly expenses, save for the future, and achieve long-term financial goals. As residents adapt to cope with these challenges, there is a growing need for measures to address affordability and financial stability in the region.