DUBAI: Consumer spending in the UAE is forecast to top $261 billion (SR978.75 billion) by 2021, expanding at a compound annual growth rate (CAGR) of 7.5 percent over the next five years, the Dubai Chamber said in a report.
вЂњThe UAEвЂ™s consumer market is largely being driven by a fast-growing population with relatively high incomes, which are key economic fundamentals that support a robust long-term outlook for spending growth in the country,вЂќ said Hamad Buamim, the president and chief executive of Dubai Chamber, said in a statement on Sunday.
Dubai ChamberвЂ™s projection was based on a Euromonitor International report, which showed that the UAE consumer expenditure per household in 2016 amounted to around $103,000, the highest compared with neighboring Gulf countries.
Bahrain was second highest with $96,000 in household spending.
Buamim also pointed out a growing number of global brands and online retailers are taking advantage of the UAEвЂ™s predominantly young and diverse population, which are considered tech-savvy consumers.
The countryвЂ™s booming tourism market continues to drive consumer spending, especially within the retail, tourism, hospitality and transport sectors, he added.
Housing expenditure for UAE consumers was pegged at $75.7 billion, or about 41 percent of total expenditure, last year while spending for food and non-alcoholic beverages reached $24.8 billion and transport expenditure at $16.7 billion.
Communication spending is expected to have the fastest growth by 2021, with a CAGR of 10.2 percent, thanks to a high penetration rate of smartphones and other digital devices in the country.
The growing popularity of mobile applications, and the emirateвЂ™s adoption of smart city solutions are also expected to boost spending in this area, Dubai Chamber said.
Health goods and medical services would be the second-fastest growing sector at an expected CAGR of 8.2 percent, followed by hotels and catering at 8.1 percent.
вЂњHigh incomes, changing lifestyles, and increased health consciousness are expected to fuel consumer demand for goods and services in family-focused spending categories, such as education, and transport, as well as premium household products and services,вЂќ Dubai Chamber said.