Dubai's consumer confidence index reached its highest level in the last quarter of 2020 since 2017, according to Dubai Economy.
The Consumer Confidence Index is conducted quarterly to gauge the consumers' spending habits and their perceptions about the economy in general. The data collected will be used to develop policies to protect consumers and to guide the private sector to estimate demand.
The latest consumer confidence index in the fourth quarter of 2020 registered 142 points, from 133 points in the same period a year earlier. The index registered 132 points in the third quarter of 2020. A comparative figure for 2017 was not provided.
Mohammed Lootah, chief executive of the commercial compliance & consumer protection sector in Dubai Economy, attributed the growth in consumer confidence to improving personal finance conditions of the residents.
"During the last quarter of 2020 as many as 82 per cent of consumers were positive on the state of their personal finances over the next 12 months, compared to 79 per cent in the same period [in 2019], and optimism was particularly high among 84 per cent of UAE citizens,” he said.
Dubai, the commercial and trading hub of the Middle East, has seen its economy recover over the last few months after the coronavirus pandemic led to worldwide border closures last year. The emirate's non-oil private sector economy registered growth in December, helped by a strong rise in business activity and a faster increase in new work, according to IHS Markit Purchasing Managers' Index.
Dubai Economy's consumer confidence index also indicated that the consumers were largely optimistic about economic conditions in the emirate over the next 12 months. The government body did not provide details on the number of people polled.
Nearly 83 per cent of consumers and 97 per cent of UAE nationals were optimistic about the economy.
About 74 per cent of consumers and 91 per cent of UAE nationals feel the time is right to buy the things they need or want to buy, according to Dubai Economy.
Nearly 43 per cent of consumers said they will spend funds left over after their basic needs on vacations while 36 per cent said they will save this amount for future needs.
The majority of respondents said they will reduce outdoor entertainment to balance their finances and reduce discretionary spending.
About 53 per cent of consumers are planning to cut down on new clothing purchases while 48 per cent of them are planning to delay technology upgrades and 39 per cent will reduce food delivery orders.
Dubai’s economy is forecast to expand 4 per cent in 2021 driven by its effective response in protecting lives and livelihoods from the impact of Covid-19 and countering a pandemic-driven economic slowdown, according to government projections.
The emirate has launched stimulus measures worth Dh1.7 billion so far to off set the impact of the pandemic.