Consumer spending in the UAE will not be slowed down, according to a new report by the Dubai Chamber of Commerce and Industry.
According to the report, consumer spending will grow at a compound annual growth rate (CAGR) of 7.5% over the next five years to exceed $261 billion in 2021, up from nearly $183 billion in 2016.
According to the analysis, based on data from Euromonitor, the UAE had the highest consumer expenditure per household during 2016, roughly at $103,000, followed by Bahrain ($96,000).
What do UAE consumers spend on?
Housing was identified as the top spending category for UAE consumers with $75.7 billion recorded for 2016, accounting for 41% of total consumer expenditure during the year.
Spending on food and non-alcoholic beverages came second, with $24.8 billion during 2016 followed by transport at $16.7 billion.
According to the analysis, the communication sector will lead consumer spending, growing at 10.2% expected through 2021, thanks to increased penetration of smartphones, and the growing popularity of apps.
This will be followed by healthcare, which is expected to grow at 8.2%, followed by hospitality at 8.1%, education at 8% and leisure at 7.7%.
Hamad Buamim, president and CEO of Dubai Chamber, said that spending in the UAE is largely being driven by a fast-growing population with relatively high incomes.
He also pointed out that a growing number of e-commerce companies that are targeting tech-savvy consumers.
Buamim added that several new mega retail developments are expected to be completed over the next four years in the UAE, which should diversify the country’s mix of retail and entertainment offerings.