Consumer confidence in the UAE remains strong, despite soaring inflation and interest rates across the globe.

According to business consultancies, corporate executives and analysts, the UAE market rapidly boosted its activities to combat the impact of the pandemic. Consumer spending stayed strong during the Covid crisis, and the trend is forecast to continue in 2023.

UAE residents are better placed to manage the inflation impact than several other Western countries, according to Crowe UAE senior partner Saad Manair, as long as they manage their finances and maintain modest spending.

“The UAE consumers have been generally extravagant in their spending, and they need to be smart in how they deploy their earnings,” Manair told Khaleej Times.

UAE consumers are becoming more confident and increasing their spending, driving economic growth. According to Hatem ElSafty, chief executive of Business Link: “With more disposable income and a desire for the latest technology and trendy products, consumers are becoming increasingly willing to spend, boosting the overall economy,” he said.

Also, as per recent research undertaken by Kearney consulting firm, consumer spending power in the UAE remains robust, despite global macro-economic environment concerns, as consumers are not planning to reduce spending within the coming six months, Zawya reports.

“While price increases have been noted across most retail categories, about 16% of consumers have reported an increase in spending on non-essential items compared to 2021. Over half, 56% of the consumers, are planning to spend on a major household purchase (Dh1,000+) in the next six months,” according to the findings.

In addition, global financial sector challenges have not affected the UAE economy as much as other countries for various reasons. 

“Although prices have increased for almost all products across the market in the UAE, the spending power of consumers has remained robust due to the increase in their revenue compared to the consumers in other markets of the world. This is because the UAE economy has remained stable despite the challenges of the Covid-19 pandemic. The lives of the residents have not been affected by the pandemic as it was in other markets with job losses and revenue cuts,” said the managing director of Jaleel Holdings, Sameer K Mohamed.

“The UAE market stepped up its activities very fast to drive through the impact of the pandemic while maintaining the standard protocols and gradually easing the restrictions. In fact, the UAE market leveraged the situation by upping its game to maintain consumer spending power. This has positively impacted the economy without major government interference in the market,” he added.