Consumer sentiment in Dubai has soared to a near four-year high recently, driven by an increase of residents’ outlook for their personal finances, according to the latest report from the Dubai Economy.
The Consumer Confidence Index for the emirate stood at 142 points during the last quarter of 2020, the highest level since the third quarter of 2017. The latest index was also way above the 133 points recorded in the same period a year earlier.
However, consumers remain cautious, with most of them expressing preference to cut back on non-essential spending, including shopping, outdoor entertainment and food takeaways or deliveries.
Decline in sentiment
Consumer confidence around the world was mostly depressed in 2020, particularly after economies worldwide grounded to a halt and millions of people lost jobs due to the coronavirus pandemic.
In the United Kingdom, sentiment dropped for the second consecutive month in November due to a sharp decline in expectations for personal finances. In the United States, confidence levels also dropped during the same month amid rising coronavirus cases.
In a statement on Tuesday, the Dubai Economy said that expectations of an improvement in economic conditions in Dubai over the next 12 months remained high among consumers, with 83 percent in the general population and 97 percent among UAE nationals expressing such optimism.
“The positive sentiment is further reflected in 85 percent of consumers looking forward to new job opportunities over the next 12 months. Economic initiatives and growth in economic activity that followed the reopening of the markets have strengthened the optimism on jobs,” the Dubai Economy said.
The majority of consumers (74 percent) also feel that the time is right to buy new things. Among UAE nationals, 91 percent shared the same sentiment.
Among those consumers who expect to have leftover funds after paying for basic needs, 43 percent said they would spend any savings on vacation, while 36 percent plan to keep the money for the future.
Most consumers (54 percent) also intend to reduce their spending on outdoor entertainment, while 53 percent want to cut down on buying new clothes.
Almost half (48 percent) also prefer to delay technology upgrades, while 39 percent would cut back on ordering food from outside.
Hundreds of thousands of job losses were forecast for the UAE last year as a result of the coronavirus pandemic. However, the UAE government has rolled out a series of fiscal packages to mitigate the impact of the coronavirus pandemic and help struggling businesses.
Towards the end of 2020, there was a renewed sense of optimism on the back of positive news regarding the roll-out of coronavirus vaccines.
(Reporting by Cleofe Maceda; editing by Mily Chakrabarty)
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