Thursday, December 08, 2005

Consumer confidence slips in UAE, but remains positive according to the MasterIndex :: AMEInfo

Quote:
The current UAE MasterIndex score of 78.1, out of a possible score of 100, is down on the 92.9 and 83.0 scores received six months and a year ago respectively, but remains fairly positive by regional and Asia Pacific standards.
. . .
United Arab Emirates consumer sentiments on Regular Income (91.3) and the Economy (90.0) continue to be very optimistic, while those on Stock Market (74.7), Employment (69.5) and Quality of Life (65.0), though weaker than previous surveys, remain positive.
. . .
Bi-annual Master Index surveys have been held across SAMEA for the past two years and across Asia Pacific for the last 12 years.

Senior Economist and Middle East Analyst at the UK-based Economist Intelligence Unit, David Butter said 'For the second half of 2005 the scores for the UAE are lower than those for the first half of the year, appearing to indicate a drop in consumer confidence. However, the fall in the overall index is not so extreme year-on-year, and there seems to be a pattern of the quality of life scores being markedly lower for surveys taken at the height of summer, when living conditions in the Gulf are at their most uncomfortable,

'The most likely explanation for this erosion in confidence about personal status is the rise in inflation. This is only partially reflected in the official figures, which put inflation for the UAE as a whole at 5% for 2004. These figures do not take into account the central importance of accommodation costs for the majority of the UAE's working population. In many instances rents and service charges have gone up by more than 25 percent over the past 18 months, although some relief has been provided by the government's decision to award 25% increases in salaries for nationals and 15% raises for expatriates,' David Butter added.

'The rising cost of living is a factor in the growth prospects of Dubai's knowledge economy. Those who might like to use Dubai as a base for advanced professional services are now concerned at the rising cost base. These concerns may start to ease over the next two-to-three years as a slew of new accommodation comes onto the market for rent or long-term leasehold. . . .'

On a market basis, Saudi Arabia (98.5) and Kuwait (90.7) continue to top the list of countries with the highest consumer sentiments. They are followed by the United Arab Emirates (78.1), India (73.1), South Africa (71.2), Egypt (62.3) and Lebanon (up slightly to 59.2).
Saudi Arabia is 98.5 and the UAE is 78.1? Something's off somewhere in this survey.

MasterCard publishes its results here.

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