UAE residents have resumed spending on clothing, petrol, dining out and luxury goods as Covid restrictions and fuel prices drop, according to a new survey. Consumer spending is back on track as the UAE economy recovers and more jobs and growth opportunities come up for residents.
A new survey released by Friends Provident International showed that UAE consumers are unlikely to axe their spending on non-essential food items like chocolates, biscuits/ cold drinks as only three per cent of respondents plan to cut spending on such items over the next three months. Only two per cent said they would cut expenses on a new or economical car, holidays, non-essential personal care products and entertainment activities.
Interestingly, 99 per cent of UAE consumers are in favour of keeping their expenses on mobile, Over the Top (OTT) services such as Netflix, beauty products, gym membership, home furniture, and home electronics.
The International Monetary Fund last week hiked the UAE’s growth forecast for this year to 5.1 per cent from its previous projection of 4.2 per cent on the back of higher oil prices. Faster economic growth results in the expansion of key sectors of the economy, hence creating more jobs for the residents and growth opportunities for businesses.
In addition, the increased UAE consumer spending is helped by the drop in petrol prices and most of the Covid-related restrictions have been removed.
Hasan Shoukat, a Dubai resident, said he’s been more frequently travelling now to meet his friends in nearby emirates in Ajman and Sharjah after the reduction in petrol prices.
“I can’t miss my friends’ gathering. I had no choice a few months back due to high oil prices. But now the fuel cost is within my budget. So I go regularly to see my friends,” said Shoukat.
Another survey released by Dubai’s Department of Economy and Tourism (DET) revealed that more than half of the emirate’s residents – 52 per cent – dine out up to three times per week.
“The cost-of-living squeeze is underway among many UAE consumers and it’s not a surprise to see a little over a quarter planning to reduce their spending on clothes and fuel. What is rather encouraging is that despite the financial squeeze the vast majority are not looking to reduce their savings plan contribution,” said David Kneeshaw, group chief executive of IFGL, which owns FPI.
Conducted by Dubai-based consultancy Insight Discovery among 880 respondents, the FPI survey found that 26 per cent of those polled cited clothes as the top area to make the reductions. The next highest-ranking issue, named by 15 per cent of respondents, was petrol expenses. A further 9 per cent of residents believe weekend activities, dining out and luxury products as the top three areas to make cutbacks in the next three months.
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