The appetite for luxury goods in Qatar, the world’s richest country per capita, is accelerating even as oil prices slump and economic growth falters.
A regional survey commissioned by AmEx (Middle East) BSC, a joint venture between American Express and Mawarid Group, found that residents and citizens in Qatar spent an average of $4,000 (Dh14,691) per month on luxury goods and services in 2015, up from $2,500 a year earlier. That’s double the average spend in the other countries in the study.
People are still “optimistic about how much they will be spending in 2016 despite the economic conditions in the region,” Mazin Khoury, chief executive of American Express Middle East, said in an interview in Doha on Tuesday. “They are not saying we are definitely looking at a bad year.”
A 60 per cent slump in crude prices since June 2014 ended a decade-long boom that fuelled growth in Gulf countries and helped governments to amass foreign assets and residents to splurge on luxury goods. Gulf nations have reduced subsidies and fired thousands of foreign workers to trim costs after oil-income plummeted.
More affluent residents and citizens in Gulf countries are holding back on luxury spending, focusing instead on basic needs amid concerns over jobs and the health of the economy. The survey said 20 per cent of respondents reduced spending on luxury goods and services in 2015, compared with a 13 per cent decline a year earlier. While respondents who earn more than $75,000 a year are changing the composition of their spending, most plan to maintain or increase consumption this year.
Savings took a hit last year, with 42 per cent of respondents in Qatar contributing less to retirement accounts. The 2015 survey is based on 430 interviews conducted late last year in Qatar, Oman, Bahrain, the UAE and Kuwait.
Changing priorities haven’t hurt business for AmEx Middle East, Mr Khoury said. Spending on travel, experiences and “personal wellness” is rising, while consumers in some countries are purchasing fewer designer clothes and giving up on fine dining by eating more regularly at home. Total spending is still increasing even as patterns shift, which AmEx can profit from by targeting promotions on goods and services expected to attract higher demand, Mr Khoury said.
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