Almost nine in ten (88%) residents surveyed in the UAE said they are worried about the ongoing global market volatility and rising inflation. However, they remain upbeat about spending money despite concerns about the economy and rising cost of living, according to a new survey by consulting firm Kearney. 

Many of them have felt an increase in the prices of goods purchased over the last three months, with 85% citing higher cost of food and beverage, 77% spending more on transport/gas and 72% noting an increase in restaurant and hotel prices. 

Despite concerns and noticeable price hikes, consumers in the UAE don’t have plans to cut down on their outgoings, with more than half (56%) saying they even plan on making a major household purchase worth at least AED1,000 ($272) in the next six months. Some of them (16%) have also spent more money on non-essential items compared to 2021. 

“Overall, the country’s strong economic foundation and continued favourable policy changes towards business and individuals have given consumers the confidence in their purchasing power, regardless of the macroeconomic environment,” said Debashish Mukherjee, Partner, Kearney Middle East. 

The International Monetary Fund (IMF) said in October that global economic growth is expected to slow from 6% in 2021 to 2.7% in 2023.

“The cost-of-living crisis, tightening financial conditions in most regions, Russia’s invasion of Ukraine and the lingering COVID-19 pandemic all weigh heavily on the outlook,” the IMF said. 

According to Kearney’s survey, 83% of consumers in the UAE reported an increase in the cost of goods purchased over the last three months. Consumers also noted an increase in the cost of clothing and footwear (70%), as well as electronics (68%). 

However, it said that key stakeholders in the UAE’s retail sector can capitalize on new consumer trends, which include stronger preference for online shopping. 

Kearney’s survey found that shopping online remains a popular channel for UAE shoppers, mainly due to the ease of purchase (66%), saving money (62%, variety (51%) and ease of delivery (48%). 

(Reporting by Cleofe Maceda; editing by Seban Scaria)