Consumer spending in the UAE is expected to grow at a compound annual growth rate (CAGR) of 7.5 per cent over the next five years to top US$261 billion by 2021, thanks to a growing population, the Dubai Chamber said in a report.
“The UAE‘s consumer market is largely being driven by a fast-growing population with relatively high incomes, which are key economic fundamentals that support a robust long-term outlook for spending growth in the country,” Hamad Buamim, the chief executive of Dubai Chamber, said in the report.
Last year, the UAE had the highest consumer spend per household in the Arabian Gulf region, amounting to $103,000, followed by Bahrain with $96,000.
Consumer spending represented 45 per cent of UAE’s GDP, compared with 39 per cent average for the Gulf region, 45 per cent for developing Asia, 56 per cent for the European Union and 68 per cent for the US.
The housing segment topped spending last year, with $75.7bn and representing 41 per cent of total expenditure, followed by food and non-alcoholic beverages in second place with $24.8bn, and transport with $16.7bn.
Communication is projected to have the fastest-growth at a CAGR of 10.2 per cent by 2021, thanks to the high mobile penetration rates and other digital services here.
Health goods and medical services will have the second fastest-growing segment, with a projected CAGR of 8.2 per cent, followed by hotels and catering with a CAGR of 8.1 per cent, education with CAGR of 8 per cent and with CAGR of 7.7per cent, according to the chamber's report.
“Going forward, high incomes, changing lifestyles, and increased health consciousness are expected to fuel consumer demand for goods and services in family-focused spending categories, such as education, and transport, as well as premium household products and services,” it said.