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Tue 27 Aug 2019 02:22 PM

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UAE consumer confidence dips on cost of living worries

Yallacompare research shows that consumer confidence in the UAE declined slightly in Q2 compared to the previous quarter

UAE consumer confidence dips on cost of living worries
Slightly lower levels of confidence in Q2 may reflect renewed worries over the cost of living, according to the research.

Consumer confidence in the UAE declined slightly in the second quarter of 2019 compared to the previous quarter, according to new research by Yallacompare, the comparison site for financial products.

Its Consumer Confidence Tracker Q2, which polled more than 1,000 UAE residents on the state of their finances and attitudes towards work, revealed that 19.9 percent of respondents feel more confident about their finances than they did 12 months ago.

That figure compares to 21 percent who felt the same way in Q1 and 22.2 percent who felt the same way in Q4 2018.

The proportion of respondents feeling less confident about their finances increased to 42.7 percent in Q2, compared to 38.3 percent in Q1.

“There was a slight fall in overall confidence in Q2 after increases in the preceding two quarters,” said Jonathan Rawling, CFO of yallacompare. “It should be noted that the Q2 confidence level is still well above the low of 14 percent that we saw in Q3 2018 and represents a small decline over the prior quarter. I think it’s too early to say that this lower level of overall confidence signals a new trend.”

Slightly lower levels of confidence in Q2 may reflect renewed worries over the cost of living. The proportion that said they were concerned about inflation, but thought they could cope with it, declined from 51.8 percent in Q1 to 49.5 percent in Q2.

The number concerned they might not be able to deal with inflation rose from 40 percent to 43.9 percent in the same period.

The number with more credit card debt than a year ago increased from 18.2 percent in Q1 to 21.3 percent in Q2 while more than 21 percent have more loan debt than a year ago, compared to 18.8 percent in Q1.

Asked whether or not their finances would impact their ability to stay on in the UAE, residents gave mixed responses. In Q2, 25.3 percent said they’re more likely to leave the UAE for financial reasons compared to 23.9 percent in Q1.

At the same time, 45.6 percent said they’re less likely to leave the UAE because of money worries, more than the 44.8 percent who said the same thing in Q1.

“There has been a slight uptick in card and loan debt as consumers find themselves spending more than they would like,” said Rawling. “We don’t yet know if this is a temporary aberration, or a sign of renewed inflationary pressures. While more people say they might leave the UAE because of cost of living pressures, it’s notable that many more are saying they won’t.”