UAE consumer spending up 20%, economy set for fastest expansion in a decade

consumer spending in United Arab Emirates The first nine months of the year were up 20% year-on-year, although inflation worry, with the second largest in the Arab world economy will expand at the fastest pace in more than a decade.

During the nine-month period, retail spending rose 15% annually, while non-retail spending rose 29% over the same period, Majid FutimeThe largest shopping mall operator in the Middle East, Report on the State of the Retail Economy in the UAE on Monday.

Spending also rose 12% in the third quarter to the end of September, driven by strong growth in fashion, watches and jewelry.

Citing point-of-sale data, Majid Al Futtaim said the increase in spending in the third quarter marked the fifth consecutive quarter of quarter-on-quarter growth across all industries.

While inflation remained a consumer concern, it eased in the third quarter. About 30% of respondents said they were “very concerned” about inflation.

However, the reading was down 9% from the previous quarter, according to research by Majid Al Futtaim.

Overall, 92% of respondents expressed “some level of concern” but said they were adjusting to the new norm by staying cautious about buying, the report said.

The e-commerce industry continues to grow substantially in the first nine months of 2022. E-commerce sales are expected to grow 22% this year to $6 billion and are on track to reach $9.2 billion in 2026.

E-commerce spending rose 34% annually between January and September, accounting for 11% of total sales in the country’s retail economy.

Alain Bejjani, Chief Executive Officer of Majid Al Futtaim Holding, said: “Another strong quarter for the UAE retail economy demonstrates remarkable resilience across the industry and reinforces the country’s steady progress towards a return to sustainable growth.”

“All indicators point to a strong fourth quarter of the year, and with Covid-19 restrictions lifted, the UAE has put the pandemic-related turmoil firmly on the back burner.”

The UAE economy has rebounded strongly from a pandemic-driven slowdown in 2021 and has picked up pace this year. It will expand by 5.4% by 2022, according to the UAE Central Bank.

Emirates NBD, Dubai’s largest bank, expects the economy to grow by 7 percent in 2022, giving the country its fastest annual expansion since 2011, when output rose 6.9 percent.

Meanwhile, Abu Dhabi Commercial Bank is forecast to grow 6.2%, driven by the oil and non-oil economic sectors.

Business activities in the UAE non-oil private sector economy continued to improve in October, S&P Global Purchasing Managers’ Index rose to 56.6, as the new Business Output climbed as demand and employment increased.

That was slightly below the three-year high of 56.7 set in August.

The country has undertaken corporate and market reforms and introduced several long-term visa options for professionals and investors, eliminating almost all Coronavirus disease Monday’s restrictions.

The move will further boost its retail economy, boost tourism and accelerate the recovery of the country’s real estate sector.

Majid Al Futtaim said travel and tourism had rebounded strongly and “consumers are now spending more than they were before the upheaval caused by the pandemic”.

As restrictions continue to ease, pent-up travel demand is unleashed – Dubai saw a 182% year-on-year increase in international tourist arrivals between January and August.

Hotels have been a big beneficiary of rising tourist arrivals, with room nights growing 28 percent annually between January and August, 17 percent above pre-Covid-19 levels in 2019 and just under 24 million, the report said.

The UAE property market has also seen a strong recovery this year, with Dubai recording its strongest performance since 2011 in the first nine months of the year.

The nine-month period saw a 60% increase in transaction volume compared to the same period last year. It grew 14% in the third quarter to 25,500 transactions. The value of deals climbed 77 percent this year to AED184 billion, the report said.

Mr. Bejjani said the continuation of forward-looking government initiatives has laid the groundwork for steady progress.

“We just need to consider the continued opportunity, safety and security this country offers to understand why the world continues to flock to the region to build their future here.”

Updated: November 7, 2022 1:41 pm