UAE’s economy behind consumers’ upbeat mood

Stronger Consumer Confidence Index (CCI) in both Abu Dhabi and Dubai reflects the UAE economy is healthy and has weathered the storms of lower oil prices and the global economic slowdown. The General Index for Consumer Confidence in Abu Dhabi’s economic performance during Q1 of 2016 recorded about 115 points on average, which means consumers are positive about the economic conditions in UAE’s Capital.
Meanwhile, in Dubai the overall Consumer Confidence Index (CCI) stood at 142 points during the second quarter of 2016. Interestingly, this was higher than that of Tokyo, Milan, Paris, New York, Bangkok and London.
The confidence shown by the consumers in both the cities is a barometer of the overall state of UAE’s economy. Consumer confidence usually increases when the economy expands, and decreases when the economy contracts.
For Abu Dhabi, the consumer confidence optimism is driven by the Abu Dhabi’s economic capabilities to accommodate the current economic challenges and endure pressures, thanks to the economy’s sustainable
diversification.
The CCI report released by Abu Dhabi Department of Economic Development included sub-indices covering the individual financial conditions index, and the index of confidence in economic policies related to the consumer. It also covered the rising inflation rate in Abu Dhabi, the consumers’ concerns related to unfavourable developments of the global economy such as the continuing decline in oil prices in the global markets, the performance of emerging economies categories particularly the main economies such as China, Russia, Brazil and other countries exporting goods, and the shifts in the global capital markets and their impact on national markets.
Consumers in Dubai appeared to be more optimistic on the overall state of the economy and job prospects. In Dubai, confidence in the state of economy during the second quarter of 2016 was largely founded on the increase in rental/property prices. There is also confidence in personal finance driven by good economic forecast.
“The Consumer Confidence Index serves as a reliable, single indicator of consumer sentiment on the economic situation. Comparing consumer perceptions on the local economy with similar indicators across other major cities enables us to evaluate how Dubai scores as a global business destination in terms of competitiveness and sustainability,” stated Mohammed Ali Rashed Lootah, CEO of the Commercial Compliance & Consumer Protection (CCCP) sector in Department of Economic Development.
Indeed, the UAE would have found difficulties in tackling the impact of lower oil prices on its economy if it had not implemented the economic diversification policy to expand sources of its income. This sound approach has not only shored up the national economy, but also reflected on the consumer confidence.
It is now important that this diversification is sustained. The economic challenges can be faced if UAE continues to promote the non-oil sectors. Both Abu Dhabi and Dubai have taken huge strides in giving Small and Medium Enterprises (SMEs) and it has to be realized that in these trying times, they hold the key to economic growth.
It is hoped that when the next survey on consumer confidence is undertaken, the UAE’s flourishing economy will ensure the current upbeat mood improves further.