Kuwaitis Raise All Confidence Indicators Except the Spending Index

ARA Research & Consultancy has released its Consumer Confidence Index in Kuwait, for September 2024 under the sponsorship of Lexus.

The ARA General Index recorded 116 points at the end of September, marking an increase of 4 points compared to August, reinforcing its high levels. The index showed improvements among both Kuwaitis and Expatriates alike. This increase is attributed to improved confidence levels in most of the sub-indicators, except for the Purchase of Durables Goods Index, which recorded a decline.

It is worth noting that the field research was conducted before the Iranian missile attack on the occupied entity. The impact of this on the regional conflicts and looming risks on consumer confidence, remains to be seen.

However, the continued improvement in consumer confidence throughout the year comes with a reason. Analysts at ARA Research & Consultancy attribute this rise in confidence among citizens and residents to several factors linked to economic and strategic policies, including:

1. The reactivation of plans to restructure the oil sector by eliminating certain departments, merging companies, and creating modern frameworks that align with the sector's strategic needs. These actions enhance the effectiveness of the development of the oil sector and its derivatives, while ensuring the necessary capital is secured for this purpose.
2. The increase in non-oil GDP in the first quarter of the year to its highest level in five years, reaching 7 billion dinars. Although, oil GDP declined by about 9% during the same period, the impact of the non-oil economy on consumers is more immediate compared to the effects of oil GDP, which are influenced by fluctuations in global oil prices and tend to manifest over time.
3. Fitch Ratings reaffirmed Kuwait’s credit rating at AA- with a stable outlook, highlighting the exceptional strength of Kuwait’s fiscal position and its strong external balance.
4. Efforts to expand economic, particularly industrial relations with several countries, including South Korea.

Rise in the Current Economic Situation Index 

The ARA Current Economic Situation Index recorded 111 points, increasing by 5 points for the month, recovering part of the points it lost in August. This improvement comes despite a decline in trading levels in the Real Estate sector, as data from the Ministry of Justice - Department of Real Estate Registration and Authentication indicated a decrease in real estate market liquidity during August 2024 compared to July 2024 by 11.9%, with August transactions amounting to 259.2 million dinars. 

It is noteworthy that the Real Estate sector impacts several other sectors.

Unprecedented Leap in the Current Personal Income Index

After a long wait, the Current Personal Income Index finally aligned with the other indexes that have shown an upward trend since the beginning of the year, jumping 15 points in September to reach 109 points, a high not seen since September 2022. 

This raises questions about the factors contributing to the increase in confidence in current personal income: 

1. The government has adopted a strategic financial policy, including an approach to interest rates that protects the purchasing power of the Kuwaiti dinar, albeit relatively at times.
2. The increase in banking credit levels ensures the necessary liquidity for both developmental and consumer levels.

In this context, the average retirement pension for citizens reached 1,355 dinars per month at the end of March, an increase of 4% from the previous year. It is also worth noting that the number of retirees reached 174,500, an increase of about 10,000 within a year.

Increase in Available Employment Opportunities 

The Current Employment Opportunities Index recorded 154 points, increasing by 5 points in a month, reaching its highest level since October 2022. An analysis of the results shows a difference between citizens and residents, as the Employment Opportunities Index rose by 10 points among Kuwaitis to reach 153 points, while it remained stable for Arab residents at 172 points. 

The demand for labor reflects growth in economic activity, which in turn boosts consumer market dynamics.

Stability in Future Indexes

Both the ARA Expected Economic Situation Index and the ARA Expected Personal Income Index remained stable at their previous monthly levels. 

The Expected Economic Situation Index held steady at 117 points at the end of September, with a 10 points increase among Kuwaitis and a 7 point decrease among residents. 

Similarly, the Expected Personal Income Index remained at 110 points, unchanged from August. However, it rose by 4 points among Kuwaitis and dropped by 3 points among Arab residents. 

ARA analysts believe that the divergence in confidence trends between citizens and residents can be attributed to the fact that residents are more vulnerable to potential future risks, especially with the expanding scope of regional military conflicts and the possibility of these affecting the countries from which most Arab expatriates in Kuwait originate.

Decline in the Purchase of Durables Goods Index

The ARA Purchase of Durables Goods Index was the only one among the six indexes that constitute the General Index to decline, recording 120 points at the end of September, losing 4 points from its previous monthly level. The decline was driven by a 7 point drop among Kuwaitis, bringing their score to 126 points in September, while it rose by 1 point among Arab residents to reach 112 points. 

September coincides with the start of the academic year and the end of summer holidays, both of which bring additional expenses. Therefore, consumers' attention tends to focus on immediate living expenses related to this time of year. ARA analysts do not believe this decline will lead to a future contraction, especially with the ongoing efforts to continue reducing interest rates.

Committed to Social Initiatives

Lexus L-Finesse Supports Breast Cancer Awareness Campaign

As part of promoting preventing health concepts every year, among people in general and women in particular, Lexus recently conducted a health awareness event during 14^th to 16^th October 2024 at the L-Finesse boutique in Assima Mall. The event was held in cooperation with “Nafas” center, a safe space for empowerment and strength in the heart of Kuwait focusing on empowerment, health, and wellness.

The core objective of this program which is part of ALSAYER Group's commitment towards of CSR activities was to educate the public the importance of early screening for breast cancer to avoid the risks of its development. The awareness session also highlighted the ways to reduce the fear of breast cancer by providing on-the-spot consultation. Visitors were invited to participate in sessions that focused on treatment and recovery.

As a gesture of appreciation to the visitors at the boutique who attended such sessions, the Lexus L-finesse distributed flower bouquets and souvenirs.

Lexus, the leading luxury automotive luxury brand that truly symbolizes the finest Japanese craftsmanship, adopts such awareness events, reflecting the importance of women's health and role in society, and the need to commit to providing the support they deserve with the exceptional hospitality in a special and distinctive atmosphere.