General Index
 
105 
 
Current Economic Situation   Future Economic situation   Current Personal Income   Expected Personal Income   Current Employment opportunity   Purchase of Durable goods
 
105    110    94    104    124    115 
 
 

Logical Decline in the Consumer Confidence Index in Kuwait

ARA Research & Consultancy has released its Consumer Confidence Index in Kuwait for April 2024, in collaboration with Arab Times Newspaper and under the sponsorship of Lexus.

Prior to delving into the results of the survey, it is worth noting that the research was completed before the dissolution of the National Assembly.

The General Index level dropped to 115 points, losing 6 points within a month and marking the lowest position since January. All six indicators covered by the research recorded negative rates, which adversely affected the General Index. Noting that the survey results confirmed an almost universal negative position by the respondents, with only 3 out of 27 components giving the General Index a positive rating between one and two points, while the remaining 24 components expressed lack of confidence, with their points decreasing by a minimum of 3 to as high as 21 points.

This situation raises several questions about the reasons for the current decline in consumer confidence in Kuwait.

Kuwait faced the COVID-19 pandemic, its health and economic repercussions, and the resulting partial or complete shutdown of economic sectors, along with the extraordinary expenses and the contraction in the annual national income.

After a brief recovery from the pandemic and its repercussions, the war erupted between Russia from one side and Ukraine and the West from the other side, leading to global trade sanctions, disruptions in supply chains, and widespread monetary inflation worldwide. Nevertheless, Kuwait managed to maintain health and social security and control inflation level which remained below 4%, whereas monetary inflation posed significant challenges in most countries around the world, including Europe and the USA which continue to suffer from the consequences of inflation.

Despite these circumstances, internal positive factors in Kuwait contributed to stabilizing the situation and securing the essential conditions for stability, which led to protecting and even gradually improving consumer confidence, as witnessed in the recent years.

As for the decline in confidence based on the survey data, it can be attributed to three main reasons:

First, the ongoing war in Ukraine without clear predictions on the war’s outcomes. These international and regional hotspots caused disruptions in supply chains, leading to increased shipping costs, and risks potential which in turn raised the prices of goods, foodstuffs, travel, and services, impacting consumer psychology.

Second, the uncertainty in the course of the war in Palestine and Israeli aggression on Palestinian territories, without the ability to determine the future of this war and its repercussions on the overall complex geopolitical situations and the questions around it.

Third, the sudden shock to Kuwait Stock Exchange, which managed through its efforts to secure advanced organization, achieve multiple gains and attract foreign capital for investment in several sectors. As Kuwait Stock Exchange occupied its position among its peers internationally, it was taken by surprise in the last week of April by a sharp decline in the share prices of Agility by an unprecedented rate of above 40%, posing a significant burden on Kuwait Boursa as well as both financial and non-financial markets in Kuwait, and raising questions about the causes of this decline in stock price and its negative implications on the stock exchange's good reputation and the stability and development of its listed companies.

 

Decline in Current and Expected Economic Situation Indexes

In these pressing regional and global climates marked by uncertainty and the inability to issue unified future forecasts, along with rising prices of commodities, foodstuffs, and services exerting pressure on consumers’ daily lives worldwide, ARA’s Expected Economic Situation Index recorded 110 points, with a decline of 7 points within a month, reaching its lowest level in over a year.

Regionally, the Expected Economic Situation Index decreased by 22 points in the Capital, 18 points in Hawalli Governorate, and 9 points in Al-Farwaniya Governorate, while it increased by 14 points in Mubarak Al-Kabeer Governorate and 4 points in Al-Ahmadi Governorate. Notably, individuals with salaries exceeding 2,850 dinars per month expressed their pessimism about the economic future, with their index level falling by 23 points. Moreover, all working groups involved in the survey unanimously adopted a negative stance, with their indices decreasing between a minimum of 3 points and a maximum of 14 points.

On the other hand, the Current Economic Situation Index registered 102 points, down by 4 points, with 16 out of 27 survey components expressing lack of confidence in the current economic conditions.

Nevertheless, the facts affirm that Kuwait's economic situation is in a sound shape, based on the following:

The World Bank forecasts Kuwait's growth at 2.8% this year and 3.1% next year.

The net profits of 137 listed companies on the stock market for 2023 amounted to 2.536 billion dinars.

Despite the contraction in the volumes of oil production and exports, following OPEC's decisions aimed at regulating the supply and demand in oil markets to raise oil prices to levels beneficial for both producing and consuming countries alike.

The expected average oil price in the fiscal year 2023/2024 budget was estimated at 70 dollars per barrel, while the current oil price is approximately 90 dollars per barrel.

Additionally, deposits in Kuwaiti banks have increased, enhancing borrowing levels across all tiers, and investments in various economic sectors, as well as offering personal facilities which have contributed to elevating Kuwait's economic growth level.

The percentage of respondents apprehensive about the upcoming economic expectations might be the result of the stock market crisis that occurred in the last week of April, alongside the regional and global geopolitical climates.

 

Decline in the Personal Income Indexes

The Current Personal Income Index registered 94 points, a decrease of 7 points compared to last March, while the Expected Personal Income Index recorded 104 points, down by 4 points.

The overwhelming majority expressed their lack of confidence in both income indexes, particularly the private business owners, who awarded only 71 points to the Current Personal Income Index, dropping 58 points from their previous balance, whereas the loss was less severe for the Expected Personal Income Index with a decrease of 9 points.

The amount of 3.86 billion dinars, which represents the volume of remittances sent by foreign workers over a year, decreased by 28.5%. This decline may be attributed to a reduction in the workforce in Kuwait and also to a decrease in their ability to save.

 

Divided Opinions about Employment Opportunities

The Current Employment Opportunities Index serves as a dedicated measure for economic activity trends and the most active sectors can sometimes be predicted based on the index.

The research figures indicate a divergence in the positions and opinions of the respondents, where they were evenly split. This index recorded 124 points in April, declining by 5 points from its monthly level and 4 points compared to April 2023 results. Notably, 14 out of the 27 survey components expressed a negative stance on Employment Opportunities, while the other components were positive in their assessment.

Regionally, this index increased by 23 points in Mubarak Al-Kabeer Governorate, 29 points in the Capital, and 7 points in Hawalli Governorate, whereas it declined by 32 points in Al-Ahmadi Governorate, 23 points in Al-Farwaniya Governorate, and 18 points in Al-Jahra Governorate. Additionally, there was a notable variance in positions, with the ratio rising by 8 points among citizens, while the index declined by 25 points among Arab residents within a month. This difference in assessing the available employment opportunities in the market affects all components of the survey, including working categories and various other social groups.

 

Consumer Credit Maintains Consumption Levels

The Purchase of Durable Goods Index for April 2024 registered a ratio of 115 points, down 7 points from its previous monthly balance, yet up 15 points on a yearly basis compared to April 2023. Despite the monthly decline affecting nearly all indices, the consumption index still holds a good position.

 Notably, the level of consumer credit and banking and personal facilities reached half a billion Kuwaiti dinars during a month through Kuwaiti banks. This credit effectively contributes to stimulating economic activity in both the production and consumption sectors. In terms of spending by citizens, travel abroad and tourism expenses amounted to 4.39 billion dinars in 2023.

The Purchase Index rate for April 2024, under the current external and regional conditions, confirms the resilience and economic strength of the Kuwaiti markets.

 

Heritage · Leadership · Growth

ALSAYER GROUP HOLDS REMARKABLE CEREMONY

TO COMMEMORATE 70TH YEAR ANNIVERSARY

A grand celebration was recently held to mark the 70th anniversary of Al-Sayer Group in Al Yasmin Ballroom at the Waldorf Astoria Hotel - Kuwait. The event reflected the remarkable success story of the Group dating back to 1954. It has been a journey spanning seven decades of achievements and successes facing several obstacles and challenges. The foundation of the business was laid by Mr. Naser Mohamed Al-Sayer and his brother Mr. Bader Mohamed Al-Sayer with a big dream that was enhanced by an insight into the future, ambitious steps, and unlimited passion.

The first milestone was in the Al Qibla area as the first Toyota showroom in Kuwait and was part of the Mohammed Naser Al-Sayer family home. Since the very beginning of that journey, the wheel of development and innovation has been continuous, as the pioneers of automotive sector in Kuwait with Japanese brand Toyota, followed by Lexus, and of course service centers and spare parts outlets, then, sectors of car rental, animal feed, tires, heavy equipment, oil and paint, insurance, and others. During the past 10 years, the group began further expanding and investing in new areas such as real-estate, education, and healthcare.

The commemorative ceremony witnessed distinguished and unprecedented attendance that included: Diplomats, Officials from Ministries, Government agencies and institutions, team of principals representing brands, and senior Management from press and media. The ceremony was also attended by
high-level delegation from Toyota Motor Corporation.

On this occasion, Mr. Faisal Bader Al Sayer said: "First, we ask God Almighty to protect our beloved country Kuwait and protect the leader of the nation, His Highness the Emir Sheikh Meshaal Al-Ahmad Al-Jaber Al-Sabah, who leads us to safety and takes us to new horizons of glory and prosperity. We belong to this beautiful land of Kuwait and are an integral part of the fabric of its authentic society. We will not hesitate to support the economic development in the country by contributing to the growth in the private sector. We are confident and certain that the future is more beautiful, and that Kuwait is coming to stages of comprehensive renaissance, growth and prosperity in various fields."

"On this occasion dear to all our hearts, I would like to thank our valued customers, ministries, government agencies, business partners, banks, insurance companies, leasing, press and media. Thank you to our brand representatives who have shared our success for many years" added Faisal Al Sayer.

According to a top Toyota Executive: "Allow me to congratulate you on the 70th anniversary of ALSAYER Group and for its significant contribution to Toyota's success over the past 70 years. I would like to mention how the founder of Naser Mohamed Al Sayer spent more than 45 hours traveling through several countries to reach Japan, from where our 70-year relationship began, the second longest partnership in the world."

The ceremony included the screening of 3 documentaries about Al-Sayer that keep pace with the stages of the Group's development reflecting its 3 core pillars: “Heritage - Leadership – Growth”. Towards the end of the ceremony, the attendees witnessed a special entertainment before the dinner banquet.

 


 
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