Job losses threaten economy

Unemployment is one of the major threats to the economy, as layoffs spread from property and financial services to other sectors, analysts say.

As the majority of the labour force is made up of foreign nationals, they fear rising job losses could lead to a population outflow as expatriates made redundant are required to leave the country.

However, Sultan Nasser al Suwaidi, the Central Bank Governor, said the UAE was not headed for a recession, but instead looking at posting “low single-digit growth in 2009”. He said the Central Bank might ask local lenders to set aside funds for potential write-downs, according to Reuters.