Consumers in the UAE lost enthusiasm in the final three months of last year, pushing the country out of the top 10 in Nielsen's confidence rankings.
The Emirates had been in the top 10 most positive countries on the global consumer confidence index compiled by the market research group for the previous three quarters.
Sevil Ermin, the managing director in the UAE for Nielsen, said the Emirates' drop in ranking was partly due to confidence in several countries, particularly those in emerging markets, rising above the 100-point neutral mark. The UAE's score, however, fell four points to 97.
"Throughout this year, and even last year, there were times where the UAE had a score lower than 97," she said. "However, it was still among the top 10 countries. It is very much based on how the other countries are doing."
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The decline in confidence stems in part from deteriorating perceptions of local job prospects. About 50 per cent of respondents to Nielsen's survey said prospects were good or excellent in the fourth quarter of last year, down from 54 per cent in the third quarter.
The ongoing political unrest in north Africa might hit regional consumer confidence, but it was too early to say how or when, Ms Ermin said.
"Consumer confidence is heavily linked with confidence in the country's economy, and in many countries, economy is linked to political status of the country," she said. "If you look at the chain reaction, you might expect that what's happening today politically might impact overall confidence."
About 68 per cent of consumers in the Emirates had changed their spending habits to save on household expenses, Nielsen found. Changes included cutting back on spending for clothing, entertainment, phone service and takeaway meals, and switching to cheaper grocery brands.
Many UAE consumers were also pessimistic about the local economy: 69 per cent believed the UAE was in a recession, and only one third believed the country would emerge from it in the coming year.
Still, consumer confidence in the UAE was above the world average. Overall global consumer confidence stayed static in the last quarter at 90 points.
India was the most optimistic country worldwide, with 131 index points, followed by the Philippines with 120 points. The most pessimistic countries were Portugal and Croatia, with 45 points each.
Regionally, Latin America was the most optimistic, with an average score of 100 points in the fourth quarter. The Asia-Pacific region came in second with a rating of 90 points, followed by the Middle East and Africa at 89 points.
Nielsen surveyed about 29,000 online consumers in 52 countries between November 10 and December 1 last year.
