ARAB TIMES, WEDNESDAY, SEPTEMBER 1, 2021 BUSINESS 10

Special Report ARA Consumer Confi dence Index – July 2021 Consumer morale stable, personal loans jump

n account of its interest for moni- Otoring the economic situation in Kuwait, “ARA Research & Consultan- cy” issues a monthly Consumer Confi - dence Index, in collaboration with the “Arab Times” newspaper and under the sponsorship of the “Lexus” trade- mark. The Consumer Confi dence In- dex is considered as the only indicator that measures the Consumers’ psycho- logical factors, based on people’s opin- ions and their prospects about the cur- rent economic situation and its future as well as their expectations regarding their fi nancial conditions, and how that refl ects on their purchasing power. The Consumer Confi dence Index is issued the fi rst Sunday of each month, and is based on quantitative research on a sample of 500 people, distributed among Kuwaitis and Arab residents in the balance of supply and demand for the positive refl ection of the economic different Governorates. fuel and thus a return to drop in prices. recovery and the activity of markets The study was conducted by tele- There is no doubt that several posi- based on several factors, perhaps the phone through a random call selection, tive factors helped to balance the level most prominent of which are: taking into account that the distribution of confi dence. Below are some of its 1. The increase and quasi stability of of the sample should be representative headings in this context: oil prices. of the population in Kuwait. 1. The State following up on the ap- 2. The Stock exchange gains that The general Consumer Confi dence proval and implementation of many constitute a positive incentive for the Index is based on six indices which the investment projects in energy, infra- various sectors and companies listed researchers at ARA use to measure the structure and other fi elds. there. level of the consumer satisfaction and 2. Kuwait Stock Exchange achiev- 3. The Future Generations Reserve Confi dence level varies be- optimism. These are: ing signifi cant gains during the fi rst Fund has been intact, despite the 2020- tween Current and Expected • Current Economic Situation Index half of the year, amounting to KD 5 2021 budget defi cit of nearly KD 10 • Expected Economic Situation In- billion, refl ecting the extent of eco- billion, and the inability of current Personal Income Index dex nomic recovery achieved and stimulat- oil prices from reaching the budget’s The Current Personal Income Index • Current Personal Income Index ing various sectors to achieve further break-even point. for July 2021 recorded a ratio of 86 • Expected Personal Income Index recovery. 4. The government’s program of points, down 11 points in a month, and • Current Employment Opportuni- Within these climates, citizens re- approving and starting to implement adding four points compared to July ties Index corded a General Index rate of 102 19 projects at a cost of about KD 19 2020. • Purchase of Durables points with the addition of three points, billion, including 14 billion govern- When analyzing the reasons for the Index while Arab residents recorded only 99 ment projects and five partnership loss of this rate 11 points in a month, The indices’ results in a month ba- points, decreasing seven points within projects, as well as the movement a number of questions arise about the sis measure the psychological state of a month. of the real estate sector, which has developments that forced the decline consumers in Kuwait, which equal 100 Increased Confi dence in the achieved some relative recovery. of this index during the phase of eco- points. This result (100 points) draws This current and future activity must nomic recovery, albeit gradually. Note the line between optimism and pessi- Economic Situation despite the have been an additional factor in in- that the main factors determining the mism among consumers. The more the Continuity of the Epidemic creasing consumer confi dence in the value of income and its purchasing index surpasses this point, the more Kuwait’s support for OPEC’s efforts economic situation. power have not changed. the psychological state of consumers to stabilize oil markets and recover the In this context, citizens gave a ratio The exchange rate of the Kuwaiti in Kuwait is considered to be inclined global economy refl ects Kuwait’s in- of 87 points for the Current Economic dinar and purchasing power are stable. towards optimism. The more the index terest on the one hand and embodies Situation Index by adding two points Annual monetary infl ation remains declines below this point, the more the importance of oil prices in ensuring and Arab residents 84 points by losing within acceptable levels. pessimistic the outlook. the fi nancial and economic stability of one point. There have been no out-of-the-ordi- nary consumer price rises. The Capital Governorate is the the oil-exporting countries, especially At the Regional Level: those that depend decisively on oil The Capital increased its ratio to If we exclude the basic factors de- Most Trusted during July 2021 based fi nancial resources for their na- 117 points by adding 13 points, and termining income and look at other as- ARA Research & Consultancy has tional income on the other hand. Hawalli Governorate strengthened pects, the research data shows: released its Consumer Confi dence In- Therefore, there is an organic link its ratio by 12 points, but on the other The tendency of the majority of dex in Kuwait, for July 2021 in col- between oil revenues and the econom- hand the rate of Al-Jahra Governo- research components to express their laboration with Arab Times newspaper ic and fi nancial conditions in those rate decreased by 13 points and Al- dissatisfaction with the current per- and under the sponsorship of Lexus. countries. Ahmadi Governorate by 9 points. sonal income levels, contrary to the The General Index registered 101 The research data during the month There was a 15-point decline in the stability of the Expected Personal In- points, losing one point in a month of July 2021 showed a signifi cant in- rate of those with below intermediate come Index. and adding 1 point on a yearly basis. crease in the level of confi dence in the level of education. Discrepancy among the components It is noteworthy that the Capital Current and Expected Economic Situa- Also, the rate of those with higher of the research between those who alone increased its previous monthly tion in Kuwait. This reality was refl ect- salaries (monthly KD 2,250 – 2,849) grant their confi dence to the Index rate ratio by 32 points, as it scored 103 ed in the Current Economic Situation decreased by 27 points within a month. and those who are dissatisfi ed with it. points, which is the highest rate among Index recording 88 points, by adding These are some of the Current Eco- If we take a comprehensive look at the the research components during the three points in a month and decreasing nomic Situation Index ratios. As for research categories, they can be sorted month of July. three points on an annual basis. the Expected Economic Situation In- into three large categories; the fi rst one being employees of the government and The Increase in Current Employ- tion of funding sources. The stability of the General Index While the Expected Economic Situ- dex, it earned the confi dence of the ment Opportunities Index reveals a balance between the posi- ation Index increased to 114 points, overwhelming majority of respondents oil sector and large companies such as Personal Loans Jump to Their banks. This category enjoys stable in- The Current Employment Opportu- tive effects of the increase in oil prices boosting its previous monthly balance with 24 out of 27 components of the Highest Levels comes and job continuity. nities Index registered 132 points by and the expectations over the medium by 9 points. total research. The second category, employees of adding three points in a month, thus The Purchase of Durable Goods term for further rise in prices versus The increased confi dence in the Noting that the rate of this index in- occupying the best position among Index stopped at a rate of 97 points, Current and Expected Economic Situa- creased by 9 points, while the Capital’s the private sector, where the disparities the negatives of the renewed spread of arise due to the varying conditions be- four rates in two years. dropping 27 points compared to June the pandemic in many developed oil- tion Index refl ects the current satisfac- rate increased by 31 points within a The notable increase in the rate of 2021 and 3 points on an annual basis. tion, conviction and further confi dence month, refl ecting the solid confi dence tween one economic sector and anoth- consuming countries, and the renewed er, and the extent to which it is affected this Index was highlighted by the Cap- Note that last June’s ratio had jumped fear of imposing harsh measures to in the economy within most of the re- of the Capital in the economic condi- ital governorate’s respondents by 35 by 16 points. search components, thus embodying tions. by the repercussions of the pandemic. fi ght the epidemic and its impact on The third category is the labor force points within a month. It is normal that the level of con- in various sectors such as construction, It is necessary to look at this rate sumption in Kuwait falls during July industry, trade and others. across different working categories due to the travel cost of many citizens At the beginning of summer, when to note a boost in confi dence with the and their families abroad. economic activity resumed in Kuwait, existence of vacancies among employ- As for the factors that encourage some sectors suffered from a shortage ees with high competencies and high the activity of the markets, they are in expatriate workers, parts of which re- salaries, unlike the category with edu- present, whereby the volumes of per- turned home to escape unemployment. cation levels from intermediate to the sonal loans have increased to their In this period, due to the shortage of lowest of the grades, i.e. unqualifi ed highest levels, as well as the Kuwaiti manpower, especially qualifi ed ones, labor, whereby its monthly rate de- dinar retaining its purchasing power individual incomes rose on the basis creased by six points. on the one hand, and the easing of pre- of supply and demand. However, the The important conclusion regarding cautionary measures in the face of the balance returned to supply and demand the size of current employment oppor- pandemic on the other hand. during July and consequently some in- tunities remains in the framework of Within this atmosphere, citizens comes declined and this refl ected on the following up on the implementation of granted the Purchasing Index a rate psychology of respondents. the Kuwaitization Policy of the national of 102 points, and Arab residents 85 In this atmosphere, citizens granted workforce and reducing expenditures on points losing 18 points from their pre- this index a ratio of 116 points by add- the public sector. This requires: vious balance. ing six points, while the rate of Arab Modernizing the economic structure At the regional level, only the Capi- residents decreased to 60 points with a to ensure the diversity of income sourc- tal recorded a positive rate and added loss of 18 points within a month. es, raise the level of productivity and 21 points within a month, while the At the regional level, the rate has encourage national workforce to engage rates of all the other governorates de- decreased in: Al-Ahmadi Governorate in the private sector, and establish part- clined by high proportions: by 29, Hawalli Governorate by 24, and nership companies between the public Hawalli Governorate by 56 points, the Capital by two points, and the rate sector and private companies. Mubarak Al-Kabeer Governorate by of Mubarak Al-Kabeer Governorate Preparing national cadres of em- 50 points, Al-Ahmadi Governorate by increased by 27 points. ployees, engineers, administrators and 20 points, and Al-Jahra Governorate While the Expected Personal In- economists and qualifying them to de- by 20 points. come Index has stabilized at 104 velop economic structures on modern These numbers prove the contrac- points, armed with higher oil prices foundations is the basis for achieving tion in the volume of market activities and further recovery of the Kuwaiti the goals of the state and the govern- during the summer. It is necessary to economy based on easing the manda- ment to expand and consolidate, and follow the market movement activity tory measures to confront the pan- to facilitate the Kuwaitization of the during the coming months in order to demic. workforce and increase the diversifi ca- determine its next course.