Consumers in the United Arab Emirates plan to adjust their lifestyle by reducing household and miscellaneous expenses over the next three months, according to a study by global life insurance company Friends Provident International (FPI).
The survey of 880 respondents in the United Arab Emirates by consultancy firm Insight Discovery found that 26% of respondents rank clothing as the main area in which to reduce their spending, while 15% consider spending on petrol as the first element to reduce their expenses.
Another 9% of residents think weekend activities, restaurants and luxury goods are the top three areas to cut back each over the next three months.
The survey also shows that inflation eats into the budgets of all households, whether singles, married couples without children or families. One in three singles (29%) and one in four childless married couples and households with families plan to cut back on clothing the most, followed by gasoline.
Some 99% of consumers favor maintaining their spending on mobile/broadband/TV and subscriptions, beauty/care products, gym membership, home furnishings and home electronics, with only 1% between them ranking them each as the top areas for reductions.
However, despite a severe squeeze on their finances due to rising prices, 97% of investors in the UAE remain committed to saving for their future, and only 3% of them rank contributions to their savings plans. as the priority area for reducing their expenses.
David Kneeshaw, Managing Director of REIT Owner Group, IFGL, said: “This survey demonstrates that the cost of living crisis is beginning to impact the finances of people living in the UAE.
“However, the silver lining is that while consumers are controlling their spending and readjusting their priorities, the majority of them remain committed to saving for their future. The survey also provides an opportunity for businesses in the UAE to get a sense of the challenges residents face in a time of high inflation.
Stuart Shilcock, Head of Sales at FPI, added: “Each survey observation offers fascinating insights into what matters to UAE residents right now. Faced with inflationary pressures, consumers themselves must tighten the purse strings.
“That said, competition for wallet share in the remainder of 2022 is also becoming intense in the UAE. It is therefore crucial for financial advisors to ensure that the productivity, value and effectiveness of their products and services align with changing consumer preferences. This is the difficult aspect of the circumstances in which we find ourselves.