Despite fears about inflation, consumer spending increased 20% year over year in the UAE in the first nine months of this year, and the second-largest economy in the Arab world is expected to grow at its highest rate in more than a decade.
In the nine-month period, retail spending increased by 15% yearly, while non-retail expenditure increased by 29%, according to research released on Monday by Majid Al Futtaim, the largest mall operator in the Middle East.
The third quarter, which ended in September, saw an additional 12% increase in spending, driven mostly by the jewellery, watches, and fashion industries.
According to Majid Al Futtaim, who cited point-of-sale data, the third-quarter spending increase reflects quarter-over-quarter increases for five consecutive quarters across all sectors. Although consumers are still concerned about inflation, their concerns decreased in the third quarter. A little over 30% of those polled indicated inflation was “very concerning” to them.
According to Majid Al Futtaim research, the reading was down 9% from the prior quarter. According to the research, 92% of respondents overall indicated “some level of concern,” but added that they were adjusting to the new standard by continuing to be cautious when making purchases.
The sharp rise of the e-commerce sector continued in the first nine months of 2022. E-commerce sales are projected to rise by 22 per cent to $6 billion this year and remain on track to reach $9.2bn by 2026. E-commerce spending increased 34 per cent annually in the January-September period, accounting for 11 per cent of total retail economy sales in the country.
“Another strong quarter for the UAE retail economy showcases notable sector-wide resilience and reinforces the country’s steady march towards a return to sustainable growth,” said Alain Bejjani, chief executive of Majid Al Futtaim Holding.
“With all indicators pointing to a strong fourth quarter this year, and the lifting of Covid-19 restrictions, the UAE has put the pandemic-related turbulence firmly in the rearview.”
The UAE economy has accelerated this year after a good recovery from the pandemic-caused slump in 2021. According to the UAE Central Bank, it will grow by 5.4% in 2022.
Emirates NBD, the largest lender in Dubai, predicts that the economy will grow by 7% in 2022, making it likely that the nation would experience its strongest annual growth since 2011 when output increased by 6.9%. The oil and non-oil sectors of the economy will both contribute to the growth of 6.2%, according to Abu Dhabi Commercial Bank’s projections.
Nearly all Covid-19 restrictions were lifted on Monday by the nation, which has implemented business and market reforms as well as many long-term visa possibilities for professionals and investors. The action is expected to significantly strengthen the country’s retail economy, promote tourism, and hasten the recovery of the country’s real estate market.
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