Consumer confidence in the UAE held steady in the first quarter of 2019 following the big improvement in sentiment seen in Q4 2018.
This is according to the Consumer Confidence Tracker Q1 2019 from yallacompare, a Middle East comparison site for financial products. During the first quarter of 2019, the Tracker polled more than 1000 UAE residents on the state of their finances and attitudes towards work. Similarly sized surveys are conducted throughout each quarter of the year.
The Consumer Confidence Tracker Q1 2019 reveals that 21 percent of respondents feel more confident about their finances than they did 12 months ago. That figure is roughly in line with the 22% that felt more confident in Q4 2018 and well above the 14 percent that felt more confident in Q3 2018.
The proportion saying they feel less confident dropped to 38.3 percent in Q1 2019, down from 41 percent in Q4 2018 and well below the 53 percent recorded in Q3 2018.
Respondents’ views on the cost of living in the UAE were largely in line with the previous quarter and, again, sentiment is much improved from Q3 2018. Whereas 51 percent feared they wouldn’t be able to get by in Q3 last year, just 40 percent felt that way in Q1 2019. More than half (51.8%) said they will be able to get by in Q1 2019, almost the same as in Q4 2018, but well up on 44 percent in Q3 2018.
The impact of VAT, introduced in 2018 at 5 percent, is also clearly being absorbed by UAE residents. The proportion declaring themselves unaffected by VAT rose to 31.6 percent in Q1 2019, up 1.8 percent percentage points from Q4 2018 and well above the 22.8 percent reported in Q3 2018.
The proportion saying they are struggling with VAT dropped to 14.8 percent in Q1, from 16.1 percent in Q4 2018 and 26.9 percent in Q3 2018.
The percentage saying they were more likely to leave the UAE because of their finances was largely unchanged from the previous quarter at 23.9 percent, but well down from Q3 2018 (34.3%). “It’s clear from the Q1 findings that consumer confidence is holding up after the big improvement we saw at the end of 2018. Consumers are now accustomed to VAT and have factored it into their household budgets. As a result, confidence levels are now back to, or exceeding, where they were at the start of 2018 and we expect to see them stay there for the foreseeable future,” said Jonathan Rawling, CFO of yallacompare.