staff reporter. SUPPLIED

As global inflation soars, consumers in the UAE plan to adjust their lifestyles by reducing their household and miscellaneous expenses over the next three months, according to the latest survey conducted on 880 respondents in the UAE by Dubai-based consultancy Insight Discovery, on behalf of the global life assurance company Friends Provident International (FPI), a business regulated by the Central Bank UAE. Asked which areas they will reduce their spending over the next three months given the rising prices, 26 percent of those polled cited clothes as the top area to make the reductions. The next highest-ranking issue, with 15 percent of respondents, was petrol expenses. A further 9 percent of residents believe weekend activities, dining out, and luxury products as the top three areas to make cutbacks in the next three months. In terms of gender, women (31 percent), as opposed to just 24 percent of men, expressed they would reduce expenses on clothes first, then other areas. Clothes/apparel and petrol ranked as the first and second areas, respectively, to see cutback by residents across all age groups, income groups, Emirates in the UAE, and nationalities (consisting of Emiratis, Arab expats, Asians, Westerners, and others) in the survey. Emiratis were at the forefront regarding reducing spending on clothes and petrol, with 35 percent ranking clothes and 20 percent ranking petrol as the top two cutback areas, followed by Westerners (28 percent). However, in terms of reducing spending on luxury products, just one percent of Emiratis (the least among all respondents) consider it the top area for cutback, compared to 20 percent (highest among respondents) by western residents. The survey also shows that inflation is biting into budgets across all households, whether single individuals, married couples with no children, or families. One in three single individuals (29 percent) and one in four married couples without children, as well as households with families, plan to cut down on clothes expenditure the most, followed by petrol. However, despite the rising cost of living, 97% of consumers surveyed remain committed to saving for their future. Only 3% of them rank contributions to their savings plans as the top priority area to reduce spending. Similarly, other areas that are not on the priority list to face the axe by consumers are utilities and non-essential food items (chocolates, biscuits/ cold drinks), with only 3% of them ranking these items on top, while just 2% plan to prioritize cutting expenses on a new or economical car, holidays, non-essential personal care/ beauty products and entertainment activities. Likewise, 99% of consumers are in favor of keeping their expenses on mobile/ broadband/ TV and OTT subscriptions, beauty/ grooming products, gym membership, home furniture, and home electronics broadly unchanged, with only 1% of them ranking each of them as the top areas for cutbacks. "The cost-of-living squeeze is underway among many UAE consumers and it's not a surprise to see a little over a quarter planning to reduce their spending on clothes and fuel. What is rather encouraging is that despite the financial squeeze the vast majority are not looking to reduce their savings plan contribution," said David Kneeshaw, Group Chief Executive of IFGL, which owns FPI. Stuart Shilcock, Head of Sales at FPI, added, "Every observation of the survey is offering key insights into what matters to UAE residents right now. It's belt-tightening time for UAE consumers as they plan to continue cutting back on their discretionary spending over the next quarter. As the survey reveals, consumers are adopting a mindful approach to saving money in order to brace for the rising cost of living." BKM/ Expat Media
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