Every dirham we spend buys us a lower quality of goods is known as inflation.
The price of commodities and goods is growing exponentially, the less the purchasing power the more the inflation rate. The inflation devalued money and made it harder for the common man to think about savings or investments.
How does inflation impact the country?
There are types of inflation and every inflation has its own part consequently
such as Deflation is when a consumer has higher purchasing power it may seem like a good thing but it will lead to regression. Hyperinflation is an overall rise in prices and stagflation is when there is high unemployment and high inflation altogether.
On Wednesday, 7th May 2022. There was an announcement to an increase of the base rate by 50 basis points to 2.25 percent
Data from the UAE’s National Bureau of Statistics show that the annual inflation increased to 2.58 percent in November 2021, from 1.86 percent in the previous month. It was the fourth consecutive month of rising inflation and the highest since September 2018.
In the UAE, the main components of CPI — on the national index that has a base of 100 as of 2014 — are housing (34.1 percent of the total weight); food and soft drinks (14.3 percent), and transportation (14.6 percent). Similarly, education accounts for 7.7 percent; miscellaneous goods and services (6.3 percent); furniture and household goods (5.6 percent); communications (5.4 percent); restaurants and hotels (4 percent); recreation and culture (3.2 percent); textiles; clothing and footwear (3.2 percent); medical care (1.4 percent) and beverages and tobacco (0.3 percent).
The countries with higher saving rates have a greater and faster impact on the development economy than those with less saving rates. Capital accumulation opens the chances of productivity by opening a chance of producing goods and enhancing the value of money by revolving it within the country.
How does insurance play a role in it? The insurance broker works as a medium between the consumer and the financial advisors. Every penny you use for insurance is being redirected towards the financial institution, who revolves around the money within the country, to enhance the economic growth of the country. Eventually, it plays an important role on an individual as well as business collectively, they mobilize domestic savings and enable mitigation of loss, financial stability promotes trade and commerce activity, and the insurance spreads the risk A large population gets insurance policies and pays a premium to the insurer. Whenever a loss occurs, it is compensated out of the corpus of funds collected from the millions of policyholders.
The single greatest edge an investor can have is a long-term orientation.
