The board has recently released the Global Consumer Confidence Index for the Gulf region, which was based on a poll conducted in May 2020 among more than 33,000 consumers in 68 markets, including the Middle East, Europe, Africa, Asia-Pacific, Latin America and North America.
The study found that the three biggest issues that consumers in the UAE and the rest of the Gulf Cooperation Council (GCC) region are most worried about are the job prospects, economy and health.
Consumers also now prioritize saving money and paying off borrowings and credit cards. And when it comes to investing, they tend to move away from the stock market, mutual funds and retirement funds.
Aside from people in the UAE, Saudi Arabia consumers also registered a sharp decline in confidence, with the index falling from an all-time high of 121 in the first three months of the year to 104 in the second quarter.
“Declining confidence in job prospects, personal finances and spending intentions pulled down the consumer confidence in Saudi Arabia and the UAE sharply,” the board said.
The coronavirus pandemic has been considered one of the world’s greatest threats.
It has claimed the lives of more than half a million people worldwide, decimated business revenues and forced many companies to cut jobs or close their doors for good.
As a result, people’s sentiments have fallen, with the global consumer confidence index dropping sharply from a near historic high of 106 in the first three months of the year to 92.
This indicates that there are now more pessimistic consumers than upbeat ones globally for the first time since 2016.
Most optimistic in the Gulf
Across the Gulf region, however, the overall confidence index stood at 104, the highest of any global region “despite the supply and demand shock that hit the Gulf economies at the onset of the COVID-19 pandemic,” according to the board.
Among consumers in the region, those in Oman appear to be the most positive despite the pandemic, with the country’s confidence index hitting 131.
Bahrain comes second with a confidence score of 115, followed by Qatar with 111, Saudi Arabia with 104 and Kuwait (102).
According to estimates, the region is expected to see an exodus of expatriates as a result of the coronavirus pandemic.
“Employment across the GCC could fall by around 13 percent, with peak-to-trough job losses of some 900,000 in the UAE and 1.7 million in Saudi Arabia,” Oxford Economics said in its report.
“Dependence on expat workers in vulnerable sectors means the burden of job losses will fall on the expat population. Combined with visas depending on employment and lack of a social safety net, an expat exodus is likely as travel restrictions are eased,” it added.
The UAE central bank, however, forecast that economic activity could improve by the second half of the year.
(Reporting by Cleofe Maceda; editing by Mily Chakrabarty)
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