Logical Decline in the Consumer Confidence Index

ARA Research & Consultancy released its Consumer Confidence Index for Kuwait for February 2025, sponsored by Lexus.

The ARA Consumer Confidence Index recorded a sharp decline in February, losing 7 points compared to January and settling at 113 points. This drop comes after months of rising consumer optimism, during which the General Index reached high levels not seen in years. ARA analysts believe that the intensity of this decline exceeds what can be considered a natural correction, and it undoubtedly reflects a shift in consumer confidence levels, the impact of which will become clearer in the coming months.

All six sub-indexes that constitute the General Index also declined, with drops ranging between 1 point and 39 points; the latter recorded by the Current Employment Opportunities Index. Nevertheless, it is noteworthy that despite the decline in February, most indexes have maintained relatively high levels.

There is no doubt that Kuwait is undergoing significant changes affecting multiple economic sectors. For instance, the real estate sector has witnessed price fluctuations following several government decisions and increased supervision on the proper utilization of various real estate plots. This, in addition to the global trade war that came along with Trump's return to the U.S. presidency.

Decline in the Economic Situation Indexes

The Current Economic Situation Index recorded 109 points, decreasing by 1 point in February, while the Expected Economic Situation Index declined by 5 points, settling at 120 points. Nevertheless, some positive indicators are worth noting:

• Kuwait’s sovereign wealth fund recorded an unprecedented surge, surpassing USD 1 trillion for the first time in its history.
• The current phase in Kuwait marked by construction, achievements, and structural development, with the government listing 90 construction projects.
• Steps taken towards implementing financial and economic reforms.
• Passing legislation to launch the government activity program.

In addition to increasing and diversifying business loans, which grew by 4% in 2024, reaching 1.18 billion dinars, as well as the facilities to the real estate and construction sector which amounted to 841.3 million dinars.

On the negative side, the average oil price per barrel dropped to USD 80.7 in the first ten months of the current fiscal year, compared to USD 94.4 in the previous fiscal year. Thus, given the current price stability, export volumes, and production levels, oil revenues are expected to reach 16.23 billion dinars, bringing total expected revenues to approximately 21 billion dinars. As a result, the fiscal budget ending in March, is expected to record a deficit of around 3.6 billion dinars.

Declining Confidence in Personal Income

The Current Personal Income Index dropped by 5 points in February, settling at 106 points. Meanwhile, the Expected Personal Income Index declined by 1 point, recording 111 points.

Near-Consensus Decline in Employment Opportunities

The Current Employment Opportunities Index saw a steep decline of 39 points, reaching 137 points at the end of February. This drop was observed across most of the research components (24 out of 27 components), representing all respondent categories. The index decreased by 31 points among citizens, while it plummeted by 53 points among Arab residents.

The Purchase of Durable Goods Index Loses Its Gains

Following a sustained improvement and increased willingness to spend since the beginning of last year, ARA’s Purchase of Durable Goods Index declined by 13 points in February, settling at 104 points, and approaching its lowest levels recorded in 2023.

It is natural for the Purchase of Durable Goods Index to be affected when all economic, income, and employment indexes decline. Despite official subsidies for foodstuff, essential goods, and other commodities, prices continue to rise due to higher transportation costs, driven by geopolitical pressures.

Mohamed Naser Al Sayer & Sons Est. Co. & Lexus Unveil

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and Enhanced LX Series with Advanced Hybrid Innovations

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In its ongoing mission to deliver Amazing Experiences and meet the diverse and evolving aspirations of customers, Mohamed Naser Al Sayer & Sons Est. Co and Lexus proudly unveils new enhancements to the LX series and introduces the landmark LX 700h. This electrified addition represents a significant milestone in Lexus’s commitment to carbon neutrality, combining a newly developed hybrid system with the renowned reliability, durability, and off-road performance that define the LX line.

Lexus Kuwait proudly unveiled the all-new LX 700h at a distinguished sustainability event hosted at The Murouj outdoor complex, adjacent to the Hunting & Equestrian Club. This showcase highlighted Lexus's commitment to innovation and environmental stewardship.