Consumers in UAE remain optimistic despite Omicron variant

This was supported by the Dubai Expo and the increasing economic activity.

Consumer sentiment in the United Arab Emirates (UAE) remain optimistic, which was attributed to the Dubai Expo as well as the increase in economic activity and the improvement in the labour market.

On top of this, the government is expected to ease cross-border restrictions over the year as the vaccine rollout continues. Fitch Solutions forecasts a “solid growth” in the number of inbound arrivals which could expand by 51.8% in 2022.

“As the threat from Covid-19 starts to dissipate over the coming months, we expect sentiment to remain upbeat in the UAE, boding well for household spending,” Fitch reported.

This followed the release of the household credit index, published by the Central Bank of the UAE, that showed the index stayed above average at 24.6. The index is considered a proxy for consumer confidence.

“Our projections for positive household spending growth in the UAE in 2022 is in line with our Country Risk team's forecast that the domestic economy will grow by a real rate of 4.1%, accelerating from a muted recovery of 3.7% in 2021,” the report also read.

Fitch had also projected consumer spending growth in UAE to “normalise” to 3.6% in 2022 from the estimated growth of 7.5% in 2021.

This comes as the favourable base effect has started to wear off.

Related: Consumer spending growth in UAE to ‘normalise’ to 3.6% in 2022