Sunday, Aug 13, 2017

DUBAI

Consumer spending in the UAE, which amounted to nearly $183 billion in 2016, is forecast to rise at an annual rate of 7.5 per cent over the next five years to exceed $261 billion in 2021, analysis released by the Dubai Chamber of Commerce and Industry on Sunday showed.

The report, based on recent data from Euromonitor International, revealed that consumer expenditure per household during 2016 was highest in the UAE when compared to other GCC countries, amounting to around $103,000, followed by Bahrain at $96,000.

The top spending segment for UAE consumers was household goods, such as kitchenware, baby items, and bedding, with $75.7 billion recorded for 2016, accounting for 41 per cent of total consumer expenditure during the year. Food and non-alcoholic beverages was the second-largest category with $24.8 billion worth of spending during the same year, followed by transport ($16.7 billion).

Hamad Buamim, President and CEO of Dubai Chamber, said in a statement: “The UAE‘s consumer market is largely being driven by a fast-growing population with relatively high incomes, which are key economic fundamentals that support a robust long-term outlook for spending growth in the country.”

Buamim added that the UAE’s predominantly young and diverse population is attracting the interest of international brands and a growing number of eCommerce companies that are targeting tech-savvy consumers. He noted that the country’s tourism market continues to drive consumer spending, especially within the retail, tourism, hospitality, and transport sectors.

Several new large developments are expected to be completed over the next four years in the UAE, which are expected to enhance and diversify the country’s mix of retail and entertainment offerings, and further capitalise on the expected growth in consumer spending, he added.

In the report, the fastest growing category for UAE consumer spending was identified as communication, which includes smartphones. The second fastest growing category is health goods and medical services.

According to the statement from Dubai Chamber, in the future, high incomes, changing lifestyles, and increased health consciousness are expected to fuel consumer demand for goods and services in family-focused spending categories, such as education, and transport, as well as premium household products and services.

In addition, the analysis showed that consumer spending accounted on average for about 45 per cent of the UAE’s GDP, compared to a 39 per cent average for the GCC region, 45 per cent for developing Asia, 56 per cent for the EU, and 68 per cent for the United States.

Staff Report

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