Confidence Indexes in Future Conditions Correct Excessive Optimism

ARA Research & Consultancy released its Consumer Confidence Index for the State of Kuwait for May 2026.

The ARA Consumer Confidence Index stood at 123 points at the end of May, a decline of 3 points from the previous month. Despite this decrease compared to April, the index remains above the 120-point threshold, a record level not seen since 2013 with the exception of  April and May of this year. All component indexes declined, with the exception of the Current Personal Income Index.

ARA analysts note that the indexes underwent correction following a series of increases since the beginning of the year, which continued despite the regional conflict that affected all Gulf countries. Nevertheless, these indexes remain at elevated levels, reflecting confidence in both the economy and personal income.

The decline in the General Index affected both Kuwaiti citizens and Arab residents, dropping by 2 points among citizens and 4 points among residents. The steepest decline was recorded among women, whose index fell by 8 points compared to a drop of 2 points among men.

Current Indexes Maintain Their Record Levels

The Current Economic Situation Index declined slightly, recording 119 points, down by 1 point from the previous month when it reached its all-time high, ever since the index was established more than twenty years ago. While the index remained unchanged among men, it fell by 5 points among women at the end of May.

The Current Personal Income Index continued its upward trajectory, reaching 108 points, up by 1 point at the end of May. It was the only one among the six indexes comprising the General Index to register an increase. Among Kuwaiti citizens the index rebounded by 10 points recovering a significant portion of the losses recorded in April. A contrasting movement was observed among Arab residents, where the index declined by 7 points following the substantial increase recorded the previous month.  On the other hand, the Current Personal Income Index continued to decline among women, falling by 8 points, while it increased by 1 point among men.

Corrective Decline in Future Indexes

The Expected Economic Situation Index recorded 120 points, declining by 7 points compared to April, when it reached its highest level since the index was established in 2007. The index declined among both Kuwaiti citizens and Arab residents by 6 points and 5 points, respectively. The decline was more pronounced among women, where the index fell by 12 points compared to a drop of 4 points among men.

Similarly, the Expected Personal Income Index declined by 2 points reaching 114 points at the end of May. The decline was more pronounced among Arab residents falling by 5 points and women dropping by 8 points, while the index increased by 2 points among Kuwaitis and by 1 point among men.

It is evident that consumers in Kuwait remain confident about their current economic conditions and personal income, while their confidence in future conditions has moderated. ARA analysts note that future-oriented indexes remain at elevated levels, but in recent months these indexes have reflected consumers' expectations of significant improvements following the conflict with Iran and hopes for an end to a prolonged period of tension. However, as time passed, some consumers began to temper the excessive optimism observed at the onset of the conflict and highlighted in previous monthly reports (the survey was conducted before an agreement was reached between Iran and the United States).

Employment Opportunities Index Maintains Record Levels

After recording its highest level in more than a decade in April, the Current Employment Opportunities Index underwent a downward correction, declining by 15 points at the end of May. Nevertheless, the index remains above the levels recorded over the past ten years.

The index declined among Kuwaitis and Arab residents at similar rates. A particularly sharp decline was recorded among women, where the index fell by 21 points compared to a drop of 10 points among men.

Willingness to Purchase Durable Goods Remains Elevated

Although the Purchase of Durables Goods Index declined by 4 points at the end of May, it remains at the elevated levels achieved in April, which were its highest since July 2022.

Notably, the index increased by 9 points among Arab residents, continuing the upward trend observed since the beginning of the year, while it declined by 15 points among Kuwaitis. As a result, the Purchase of Durables Goods Index among Arab residents exceeded its corresponding level among Kuwaitis, a relatively rare occurrence.

A similar pattern was observed among women, where the index continued its upward trajectory since the beginning of the year, rising by 7 points. It was also the only index to record an increase among women in May. Among men, however, the index declined by 14 points.