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25411
Sun, 10/19/2008 - 13:57
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https://www.oananews.org//node/25411
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Consumer spending in UAE rises 18%
High inflation allied with a surge in population and income boosted the UAE's consumer spending by more than Dh43 billion in 2007 to maintain Emiratis position as the most extravagant people in the Arab World, official figures showed yesterday “Emirates Business” reported.
Private consumption, which includes household expenditure on food, rents, education and other goods and services soared by nearly 17.7 per cent to an all-time high of Dh290.35bn last year, an increase of around Dh43.7bn over 2006 spending of Dh246.6bn, Ministry of Economy figures showed.
Last year's increase recorded the highest growth rate in private consumption in the UAE over the past two decades. Growth was estimated at 9.8 per cent, nearly half the 2007 rate, while it was as high as 16.4 per cent in 2004.
Public consumption, which covers government spending on salaries, goods and services, jumped by 31.4 per cent in 2007 and the Ministry attributed the surge to higher oil revenues and an increase in civil servant wages. "The surge in private consumption last year was mainly a result of higher prices, a sharp growth in the population, higher per capita income and stronger demand for goods and services because of the economic boom," it said.
The increase last year boosted the average individual spending on consumer products to a record Dh64,695 from Dh58,322 in 2006 and Dh56,320 in 2005.
This means the UAE remained the top private spender in the Arab World although Qatar had the region's highest per capita income and inflation rate.
According to the Arab Monetary Fund (AMF) the UAE was by far the largest spender in 2006 and in previous years.
Qatar was the second in 2006 but it was far outstripped by the UAE as its private spending stood at around Dh45,000.
Inflation in the UAE swelled above 11 per cent last year from around 9.4 per cent in 2006 and nearly six per cent in 2005.
A breakdown by the Ministry of Economy showed rent was the main cause of inflation as it surged by around 17.5 per cent.
"Since rent accounts for nearly 40 per cent of the private spending by people in the UAE, mainly expatriates, it was normal to see such an increase in consumer spending last year," a banker said.
The AMF gave no breakdown for 2007 spending in Arab states. But in 2006, Kuwait ranked third, with its private consumption totalling around US$27.8bn or an individual average of nearly US$9,266.
Bahrain emerged as the fourth largest spender despite its relatively small oil wealth, spending around US$5.6bn or an average US$7,587 per person. Oman and Lebanon were ahead of Saudi Arabia although the Kingdom controls nearly a quarter of the world's oil and the fourth largest gas resources.
Despite its high final consumption of nearly US$88.8bn, which surpassed that in the UAE, average individual spending in Saudi Arabia stood at around US$3,764 for a population of nearly 23.6 million in 2006, nearly six times that in the UAE.
"As for spending, there are several factors that have made the UAE the top spender in the Arab World in the past years," the Abu Dhabi-based banker said. "They include mainly its high per capita income, liberal economic system, steady growth in the economy and financial, economic and social stability. Another factor that has to be taken into account is the rapid rise in inflation."
Private consumption, which includes household expenditure on food, rents, education and other goods and services soared by nearly 17.7 per cent to an all-time high of Dh290.35bn last year, an increase of around Dh43.7bn over 2006 spending of Dh246.6bn, Ministry of Economy figures showed.
Last year's increase recorded the highest growth rate in private consumption in the UAE over the past two decades. Growth was estimated at 9.8 per cent, nearly half the 2007 rate, while it was as high as 16.4 per cent in 2004.
Public consumption, which covers government spending on salaries, goods and services, jumped by 31.4 per cent in 2007 and the Ministry attributed the surge to higher oil revenues and an increase in civil servant wages. "The surge in private consumption last year was mainly a result of higher prices, a sharp growth in the population, higher per capita income and stronger demand for goods and services because of the economic boom," it said.
The increase last year boosted the average individual spending on consumer products to a record Dh64,695 from Dh58,322 in 2006 and Dh56,320 in 2005.
This means the UAE remained the top private spender in the Arab World although Qatar had the region's highest per capita income and inflation rate.
According to the Arab Monetary Fund (AMF) the UAE was by far the largest spender in 2006 and in previous years.
Qatar was the second in 2006 but it was far outstripped by the UAE as its private spending stood at around Dh45,000.
Inflation in the UAE swelled above 11 per cent last year from around 9.4 per cent in 2006 and nearly six per cent in 2005.
A breakdown by the Ministry of Economy showed rent was the main cause of inflation as it surged by around 17.5 per cent.
"Since rent accounts for nearly 40 per cent of the private spending by people in the UAE, mainly expatriates, it was normal to see such an increase in consumer spending last year," a banker said.
The AMF gave no breakdown for 2007 spending in Arab states. But in 2006, Kuwait ranked third, with its private consumption totalling around US$27.8bn or an individual average of nearly US$9,266.
Bahrain emerged as the fourth largest spender despite its relatively small oil wealth, spending around US$5.6bn or an average US$7,587 per person. Oman and Lebanon were ahead of Saudi Arabia although the Kingdom controls nearly a quarter of the world's oil and the fourth largest gas resources.
Despite its high final consumption of nearly US$88.8bn, which surpassed that in the UAE, average individual spending in Saudi Arabia stood at around US$3,764 for a population of nearly 23.6 million in 2006, nearly six times that in the UAE.
"As for spending, there are several factors that have made the UAE the top spender in the Arab World in the past years," the Abu Dhabi-based banker said. "They include mainly its high per capita income, liberal economic system, steady growth in the economy and financial, economic and social stability. Another factor that has to be taken into account is the rapid rise in inflation."
