Many residents in Dubai may be feeling optimistic about their financial affairs, but there are still a number of people struggling to pay off debts, experts told Gulf News.
The Department of Economic Development (DED) reported on Tuesday that a positive outlook on personal finance and job prospects by residents is causing the consumer confidence index (CCI) in Dubai to remain robust during the first quarter of 2012.
The index showed 79 per cent of the consumers feel good about their finances currently and for the next 12 months, while 66 per cent believe this is a good time to spend on wants and needs.
About 66 per cent are confident that the job prospects will improve and 67 per cent are optimistic that the economy will progress in the months ahead.
Steve Gregory, managing partner at Holborn Assets, confirmed the situation has indeed improved a bit, as he's seeing fewer people struggling to repay debts.
Emiratis, in particular, are benefiting from government initiatives to encourage banks to reduce interest rates and renegotiate debt. There are also fewer companies cutting off their work force to meet debt repayments.
"Yet still there are people trapped in debt, and the police cells are still receiving new cases every day, and the courts and prisons are kept busy processing people who do not have the ability to meet their commitments," Gregory pointed out.
James Thomas, regional director at Acuma Wealth Management, is not inclined to believe that DED's latest figures are a sign that consumers in the UAE are completely out of the woods. He said the first thing people generally do is "treat themselves" and then think about planning later.
But there are some upbeat signs worth noting, he said, such as the recent real estate reports indicating that certain sectors are improving, as well as Dubai's busier roads and malls.
Affordable rents, high incomes boost savings
More consumers in Dubai are increasingly saving their money, thanks to affordable rents and high disposable incomes. The recent report by the Department of Economic Development showed that saving is now a priority for many residents, with the number of savers rising by 15 per cent in the first quarter of the year to reach 50 per cent.
Experts said the residents' capacity to save has been buoyed by reduced housing costs. Milind Vinod, a chartered accountant and teaching fellow at Heriot Watt University, believes that the effects of the downturn seem to have died down and "this has created a major comfort zone for people who have survived the financial crisis in terms of their outflow for rent".