The UAE will see higher consumer spending next year and continue to attract a significant influx of visitors from Europe, according to a new report by the Mastercard Economics Institute (MEI).
Real consumer spending across the emirates is forecast to grow by 5% year over year in 2024, while Saudi Arabia and Egypt will see growth of 4.3% and 1.2%, respectively, the institute’s Economic Outlook 2024 said.
Across the Middle East and North Africa (MENA) region, the report noted that consumers and businesses are expected to make “crucial decisions” about how to spend or invest their money next year amid rising costs.
“Even with inflation taking a larger chunk of spending on essentials, consumers will prioritise the discretionary spending that matters most, with travel, events, live concerts and movies remaining popular choices,” the report said.
As for tourist spending, countries in the Gulf will see a 22% increase in inbound visitor spending this year compared to 2019, which is higher than the global average by 26 percentage points.
“The GCC’s strong push to grow its tourism sector have made the region one of the world’s fastest-growing destinations,” the report noted.
This year, the UAE, as well as Turkey, Egypt and Tunisia were in the top 10 fastest-growing destinations for Europeans, compared to 2022, while bookings to Italy, Spain, Portugal and Greece dropped over the same period.
“We expect this trend to accelerate in 2024,” the report said.
Headline GDP
The institute also expects headline GDP growth to increase in the GCC region, while efforts to diversify the economies will further support the non-oil sector.
“Diversification efforts supported by expansionary fiscal policy will drive the non-oil economy through higher investment, which will in turn support employment and domestic consumption,” the report said.
“While significant investment drive for more development through giga projects – large-scale and ambitious infrastructure or capital project investments- is underway in Saudi Arabia, the United Arab Emirates (UAE) seeks to maintain its position as the regional trade and investment hub.”
