As the gov’t warns consumer spending is harming the economy, Arabian Business examines the national pastime.
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IN PICS: The UAE’s shopping obsession
In its weekly report, the Department of Planning and Economy (DPE) warned that this culture of consumerism could seriously dent the country’s future economic growth if the current trend continued. (Getty Images)
The DPE said consumer spending had surged 122 percent during the last five years, jumping 17.7 percent to 320 billion dirhams ($87.1 billion) last year – almost half the UAE’s gross domestic product (GDP).n
(Getty Images)
The department said daily per capita consumer spending in the UAE stood at $27, more than seven times higher than the average daily spending in the rest of the Arab world. (Getty Images)
The DPE warned massive consumer spending was seeing a large amount of liquidity diverted away from production and investment. This was particularly concerning as 85 percent of consumer goods were imported from abroad. (Getty Images)
Loans to individuals also surged almost 40 percent in 2007 and rose a further 11.4 percent during the first quarter of this year to touch 48.41 billion dirhams, according to the central bank. (ITP Images)
Consumer loans have almost doubled over the last four years on the back of soaring economic growth spurred by revenues from record oil prices, which have jumped seven-fold since 2002. (ITP Images)
Growth in consumer spending has also been blamed for fuelling inflation in the UAE, which jumped to a 20-year high of 11.1 percent in 2007. (ITP Images)
