The UAE is the only Gulf country to witness an increase in consumer confidence for the second half of this year.
Overall consumer confidence across the Middle East and Levant has slightly decreased, likely influenced by the global economic slowdown, sub-prime crisis, increasing oil prices and rising inflation, the MasterCard Worldwide Index of Consumer Confidence revealed yesterday.
The current UAE score of 85.4 out of a possible 100 increased from 78.5 six months ago. Indications for the UAE showed that overall consumer sentiment is positive and optimistic. However, the UAE's consumer confidence index is still under the historical level of 92.9 points achieved during the second half of 2005, the highest since the index started in 2004.
The survey analyses consumers' perceptions of economic conditions over six months regarding employment, income, stock market and quality of life.
The UAE's scores for most of the indicators increased with a significant improvement in consumer sentiments on regular income at 90.7, an increase of 20.4 points from 70.3 in the first half of 2008. Sentiment on employment sharply increased to 95.8 as compared to 85.6 in the first half of 2008, as well as quality of life with an index score of 85.3 as compared to 75.9 in the first half of 2008. Sentiment on stock market has declined from 73.4 in the first half of 2008 to 65.2 in the current survey. Denzil Lawson, General Manager for Middle East and Levant at MasterCard Worldwide, attributed the surge in consumer confidence regarding regular income and quality of life to measures taken by the government and companies in the country to increase housing allowances and control high inflation rates in rents.
"However, this is a part of the increasing inflation in the UAE because another part is imported inflation due to the depreciated dollar value, which still creates worries among the population. But there are indicators the dollar value will increase during the next stage and this will increase consumer confidence in the UAE."
The markets surveyed are the UAE, Egypt, Kuwait, Lebanon, Qatar, Saudi Arabia, India and South Africa. The UAE ranked third in consumer confidence with Kuwait recording 89.4 points and Qatar 88.6 points in the second-half of 2008.
Lawson said the results indicate that consumer confidence across the GCC is still strong despite an overall decrease.
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