Wary consumers still optimistic

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Tuesday, Jan 13, 2009

Gulf News Dubai: Consumers in the UAE are less confident about their jobs and the economy than they were a few months ago, a recent study showed.

Consumer outlook on the employment scenario for the next six months has dipped significantly, although overall results show that UAE residents are still optimistic that their income, the local economy and quality of life will still be fine in the first half of 2009.

In recent months, companies in the UAE have been downsizing to cope with the impact of the global financial turmoil, rendering hundreds of expatriates jobless. But UAE residents interviewed by Gulf News were generally optimistic about the UAE economy.

Ramalingam Sankar, an Indian expatriate, believes Dubai will recover given the government's strong committment to create investment opportunities.

"Given the Dubai Government's move to raise spending, more opportunities for both local and foreign investors will be created. Dubai can then recover by the year end 2010.

"However, the government should take initiatives, which should benefit all classes of people. In the interim, it is unfortunate that a few more will lose their jobs," Sankar said.

According to the latest MasterCardMasterCard Worldwide Index of Consumer Confidence, which surveyed 3,200 respondents across seven markets in the Middle East and North Africa (Mena) between October 14 and November 11, 2008, consumer confidence in the UAE dropped from a very high 85.4 in the first half of 2008 to 75.4 in the second half of last year.

The MasterCardMasterCard index is based on a survey which measures consumer confidence on prevailing expectation in the market for the next six months. It is calculated based upon percentage response figures, with zero as the most pessimistic, 100 as most optimistic and 50 as neutral.

The consumer confidence figure for the UAE is below the market historical average (83.5) However, consumers remain highly optimistic about their regular income (91.6), the economy (83.2) and quality of life (76.7).

They are also somewhat more optimistic about the stock market (68.3) than they were in the first half of 2008 (65.2) and a year ago (73.4).

"So you can see a decline in consumer confidence in the UAE. But nevertheless, anything that's above 60 is considered solidly optimistic," said Dr Yuwa Hedrick-Wong, MasterCardMasterCard Worldwide economic adviser for Asia Pacific.

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