Dubai’s handling of the coronavirus pandemic helped boost consumer confidence levels in the emirate to a three-year high in the fourth quarter of 2020.
The Consumer Confidence Index rose to the highest level since the third quarter of 2017, with its score of 142 points increased from the 133 points in the same period last year and 132 points recorded in Q3 2020.
Scott Cairns, managing director of Dubai-based Creative Business Consultants, told Arabian Business that the vaccine rollout during January is likely to boost business confidence further not only in the UAE but among overseas investors looking at the country as part of a potential expansion plan.
Mohammed Ali Rashed Lootah, CEO of the Commercial Compliance & Consumer Protection Sector in Dubai Economy, said the rising consumer confidence in the emirate was primarily due to expected improvements in personal finance conditions.
“During the last quarter of 2020 as many as 82 percent consumers were positive on the state of their personal finances over the next 12 months, compared to 79 percent in the same period last year, and optimism was particularly high among 84 percent of UAE citizens.”
Cairns said: “The vaccine rollout has definitely boosted business confidence not only for those located within UAE, but also those outside still evaluating UAE as a potential business hub.
“Whilst we are still waiting to see the vaccine be mass-deployed, we anticipate it will enhance the travel and tourism industry rapidly once we approach our much anticipated events season. With Saudi Arabia introducing a health passport, we would anticipate this may become commonplace in the region, again bolstering travel, tourism and most certainly business.”
The rise in consumer confidence comes as the UAE announced it has now administered more than two million coronavirus vaccine doses, inoculating nearly a fifth of its population.
The Gulf nation is home to about 10 million people, mostly foreigners, and has the second-highest per-capita inoculation rate in the world after Israel.
The country has approved a vaccine developed by China’s Sinopharm, as well as Pfizer and BioNTech’s shot, and has since rolled out an aggressive vaccination campaign.
Key officials, including Dubai’s ruler Sheikh Mohammed Bin Rashid Al Maktoum and UAE Foreign Minister Abdullah Bin Zayed, have been vaccinated.
Expectations of an improvement in economic conditions in Dubai over the next 12 months also remained high among consumers as 83 percent in general and 97 percent among UAE nationals expressed such optimism.
The positive sentiment was further reflected in 85 percent of consumers looking forward to new job opportunities over the next 12 months.
Economic initiatives announced by the government and growth in economic activity that followed the reopening of the markets have strengthened the optimism on jobs, he said.
Mohammed Ali Rashed Lootah, CEO of the Commercial Compliance & Consumer Protection Sector in Dubai Economy
Overall, 74 percent consumers said they feel the time is right to buy the things they need or want to buy, while the feeling is shared by 91 percent of UAE nationals.
Among those consumers who expect to have money left after basic expenses, 43 percent said they would spend the balance on vacations while 36 percent said they plan to save it for the future.
Reducing outdoor entertainment to balance expenses and income is part of the plan for 54 percent of consumers while 53 percent said they intend to cut down on buying new clothes, 48 percent plan to delay technology upgrades and 39 percent said they will reduce ordering food.
Dubai Crown Prince Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum last month hailed the emirate’s resilience in the face of the coronavirus pandemic.
Chairing a meeting of The Executive Council, Sheikh Hamdan said Dubai had proved its ability to weather crises and overcome challenges, supported by its “flexible polices and future-oriented strategies”.
Earlier this month, he also announced that Dubai has agreed a fifth economic stimulus package to support businesses hit by the ongoing coronavirus pandemic.
In a tweet, he said an extra AED317 million ($86.3 million) was being allocated to bring the total stimulus package to AED7.1 billion.
Last month, Dubai Statistics Office said the economy, the Middle East’s business hub, will likely contract 6.2 percent in 2020.
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