While economic data shows the UAE is not in recession, consumers are feeling the pinch because of the extremely robust period two years ago
Consumers believe country in recession despite recovery
An increasing number of people in the UAE believe the country is in recession despite an economic recovery this year, the latest consumer confidence survey by the research company Nielsen shows.
Of those polled in the UAE, 76 per cent said they believed the country was in a recession, up from 74 per cent in the last quarter. But only 28 per cent in the UAE expected the country would be out of the recession in the next 12 months, a steep drop from 42 per cent in the previous quarter.
This is high compared with the global average, with just 56 per cent believing they are in recessionary times, said Sevil Ermin, the UAE director of retailer services for Nielsen.
While economic data shows the UAE is not in recession, consumers are feeling the pinch because of the extremely robust period two years ago, said Ms Ermin.
"It was really a paradise, with double-digit growth, always growing no matter what," she said. "You didn't have to think about marketing because the population was growing and business was very vivid."
This boom also contributed to an "over-optimistic" outlook in the UAE, in which consumers expected the country to bounce back just as fast, Ms Ermin said. Now they are waking up to reality.
"Everything was happening in the country at a very fast rate," she said. "The recovery was expected to happen faster but perhaps they were over-optimistic. We are looking outside and seeing that things can take more time."
While the economic mood in the Emirates was stable at 101 points, the same as the previous quarter, consumer confidence globally slipped by 3 points to 90.
The survey, which polled about 26,000 internet users in 53 countries in September, showed consumer confidence declined in 20 of 53 global markets in the third quarter, mainly in North America and Europe.
The most optimistic countries were India at 129 points and Thailand at 117 points. Saudi Arabia's seven-point surge made it the third-most optimistic nation surveyed.
The most pessimistic countries were Japan with 52 points and Portugal with 44.
The UAE held on to the 10th spot in the rankings, just behind Sweden with 102 points and Hong Kong and Malaysia with 103 points each.
But consumers in the country continue to be worried about work, with 29 per cent citing job security as their biggest or second-biggest concern over the next six months.
The proportion of those worried about increasing fuel prices in the UAE has almost doubled, to 11 per cent from 6 per cent last quarter. This comes after two petrol price rises this year.
About 61 per cent of those in the country said they viewed their personal finances as good or excellent over the next year, down from 64 per cent one quarter ago.
UAE consumers also continue to watch their budgets. About 55 per cent said they were cutting down on entertainment outside the home, up from 44 per cent in the second quarter. Half of them said they had stopped buying takeaway meals, up from 46 per cent in the second quarter.
As for their spare dirhams, about 19 per cent are investing it, up from 16 per cent in the last quarter. And about 15 per cent are funnelling it into retirement funds, up from 12 per cent a quarter ago.