Covid: UAE residents' savings swell to Dh199 billion during pandemic
Lockdowns led people to spend less on travel, entertainment, fuel expenses and shopping
UAE residents’ savings have swelled during Covid as pandemic-induced restrictions and lockdowns led people to spend less on travel, entertainment, fuel expenses and shopping.
The latest data released by the Central Bank for January-April 2021 period showed funds saved in residents’ bank accounts have increased from Dh10 billion to nearly Dh199 billion.
“If there's one thing the global pandemic has taught everyone, it's the importance of financial preparedness. More and more customers have realised their savings potential during this period of heightened awareness,” said Suvo Sarkar, senior executive vice president and head of retail banking and wealth management, Emirates NBD.
Individual customer bank balances have increased by over 10 per cent during the past year, he said.
“We have seen an overall increase in savings across all customer profiles, with a higher percentage of incomes being saved. Naturally, high income earners tend to have higher disposable incomes that help them save more in absolute terms,” he added.
But as the economy opens up, Sarkar said there has been increase in consumption and spends among the consumers in the UAE.
Anam Zubair, a Sharjah resident, said her travel and entertainment budgets have reduced substantially over the past one year because of flight suspensions and restrictions on travel and movement of the people. This helped people save funds and survive the pandemic.
“Like most of the people in the UAE, we were also mostly restricted to our homes with limited outings and outdoor activities. Since there was little opportunity of dining out and going out with family, this led to less spending,” she added.
Imran Maqbool said many people were concerned about their jobs and this prompted them to cut down on shopping, entertainment and fuel costs.
“Covid-19 was a tough time for everyone. But people managed to save some funds because they spent less on travelling, entertainment and theatres etc. Also, fear of job loss forced people to be extremely cautious in their spending,” said Maqbool.
While speaking at virtual ATM 2021 last month, Adel Ali, CEO of Air Arabia, had also said that saving accounts of individuals have gone up significantly as people were not spending.
Ambareen Musa CEO and Founder Souqalmal.com, said savings during the pandemic have gone up due to various reasons but that does not apply to everyone.
She said the Covid-19 restrictions and global shutdown meant that many holiday budgets have been untouched while going to restaurants and outings have been reduced. Eating out was not an option for a large number of residents.
“If you look at the percentage of an income people spend on entertainment in the UAE, it is not a surprise that this budget has gone untouched for months. From a lifestyle perspective, the pandemic has lasted long enough to fundamentally change the way people think about their spending and change lifestyle habits,” said Musa.
She pointed out that on the other hand, many suffered job losses, therefore depleting their savings.
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