Dubai: As more people have money to spend and the local economy continues to grow, consumer expenditure in the UAE is expected to top Dh766 billion this year, up by seven per cent from 2013, according to Euromonitor International, a London-based market intelligence firm.
The forecast expenditure for 2014 will account for more than half (58 per cent) of the UAE’s gross domestic product (GDP) for 2011, which was estimated at $360 billion.
Euromonitor International data obtained by Gulf News showed that consumer spending has been steadily rising, from Dh668 billion in 2012 to Dh715 billion last year, owing to improved optimism and non-stop retail expansion, among others. As of 2012, Dubai represented more than half (57 per cent) of the total consumer spend in the country.
“This is mainly due to the growing consumer confidence to spend, multi-channel development, growing shopping mall developments and lifestyle, as well as government support of the retailing industry that is driving tourism and benefiting grocery and non-grocery [merchants] in the country,” Fatemah Sherif, research analyst at Euromonitor International, told Gulf News.
Pick-up in spending
After falling in the aftermath of the global recession, consumer spending in different markets has begun to pick up, along with the local economy.
A report by Nielsen showed that overall consumer optimism within the Middle East region held steady in the third quarter of 2013, with Egypt reporting the biggest three-month jump of six index points to reach 83, UAE rising by four points (111) and South Africa moving up by 3 points (84).
Also in the same period, consumers in the region expressed their intention to spend discretionary income on new clothes (27 per cent), out-of-home entertainment (22 per cent) and technology (19 per cent). About 17 per cent planned to spend on holidays/vacations and 16 per cent on home improvement projects.
Sherif said the UAE consumers this year are expected to spend Dh37 billion out of their pockets on hotels and catering, Dh17 billion on leisure and recreation, Dh12 billion on health goods and medical services, and the biggest chunk, Dh316 billion, on housing.
“The growing disposable income, booming real estate, growing number of tourists and [expansion of retail space] is expected to contribute to growing consumer demand and encourage consumer expenditure in the country. Hence, expenditure is expected to continue growing this year,” Sherif added.
