Notable Rise for the Purchasing Index

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

ARA’s Consumer Confidence General Index dropped by 5 points, recording 112 points by the end of August. This decline comes after a correction wave that affected most of the indexes that constitute the General Index, following months of consecutive increases. It is noted that the confidence indexes in the Economic Situation and in Current and Expected Personal Incomes have declined, after recording high levels in the previous months. Whereas, the Purchasing Index increased remarkably, following a natural path reflecting the state of optimism prevailing in Kuwait since the beginning of the year.

It is noted that the decline affected Kuwaitis primarily, as ARA’s General Index among Kuwaitis dropped to 111 points, a 10-point decrease compared to July, while it fell by 2 points among expatriates, reaching 110 points by the end of August.

ARA’s analysts believe that this drop in the indices is merely a correction of the record levels the index had reached due to a series of positive factors, including:

• The expected total budget revenues for the fiscal year 2024/2025 have been estimated at approximately 22.51 billion Kuwaiti dinars, thanks to the increase in Kuwaiti oil prices, with the average price per barrel estimated at 85.8 US dollars, representing an increase of approximately 15.8 dinars compared to the previous fiscal year.
• The stock market achieved significant gains, increasing its market value and attracting more foreign capital.
• Oil projects were active in Kuwait during the first half of this year, with investments in this sector amounting to USD 14.9 billion.
• Additionally, Kuwaiti authorities are striving to build an economic renaissance that includes diversifying the economy, encouraging the private sector, and establishing joint ventures with it, under strategic directives from His Highness the Emir towards forming partnerships in the economic field with major countries.

Decline in Confidence in Economic Indexes and Income

Despite these positive results, confidence in both the Current and Expected Economic Situation indexes dropped by 8 points each in August. ARA’s Current Economic Situation Index recorded 107 points, while the Expected Economic Situation Index recorded 117 points.

Close monitoring of the opinions and trends of respondents in the coming months is necessary.

Decline in Personal Income Indexes

In the same way, the Current and Expected Personal Income Indexes have also declined. The Current Personal Income Index registered 94 points, losing 10 points in August, while the Expected Personal Income Index decreased to 110 points, down by 4 points.

There is no doubt that personal income is eroding globally as a direct result of the decline in purchasing power. This conclusion confirms the near-unanimous agreement among respondents, regardless of their educational or professional backgrounds, in expressing a decline in confidence in their incomes.

At the same time, inflation in Kuwait is better compared to other countries, due to the Kuwaiti government's subsidy policy for essential foodstuffs. The annual inflation rate decreased to 2.8% in June, down from 3.2%, according to the Kuwait Financial Centre. However, the prices of other non-essential items, which are not subsidized and make up the largest share of spending for Kuwaitis and residents, such as beverages, other food items, housing, and services including air transport, insurance, and others, have increased by 5.6% on a year-over-year basis.

Noting that there is a lack of accurate data on wage and salary increases in both the public and private sectors over the past years.

These factors have put pressure on purchasing power, and consequently, on consumer confidence in their personal incomes.

More than 12,000 Vacancies in the Government Sector

The Current Employment Opportunities Index in the market maintained its previous monthly level, recording 148 points, with an addition of one point. Official documents revealed that the number of vacancies in the government sector reached 12,780 jobs. 

The total workforce in Kuwait reached 2.93 million by the end of March 2024, with Kuwaiti nationals accounting for 457.5 thousand or 15.6% of the total. However, an increase is noted in the number of self-employed male and female Kuwaitis, reaching approximately 19,000.

Growth in the Volume of Spending in Kuwait

ARA’s Purchase of Durable Goods Index was the only index that witnessed a significant rise, recording 124 points, with an increase of 9 points in August. While the purchasing index remained stable among expatriates, it rose substantially among Kuwaitis, reaching 133 points, an increase of 17 points in August. This level was previously recorded at the end of last year, after His Highness the Emir of Kuwait, Sheikh Mishal Al-Ahmad Al-Jaber Al-Sabah, assumed the reins of power.

It is noteworthy that spending by citizens and residents reached record figures, amounting to 24 billion Kuwaiti dinars in the first six months of the year, according to data from the Central Bank of Kuwait. This represents a 5.6% increase compared to the same period last year, with more than 94% of the spending occurring within Kuwait.

Discover the splendor of the Lexus UX Hybrid !

Unprecedented excellence on every trip. Discover the bold design and dynamic performance that make this car the perfect choice.

An exceptional driving experience awaits you.

Official Instagram post, click here