Report by NBK Economics shows signs of recovery in consumer confidence after subdued first half of 2017
Kuwait’s consumer sector showed signs of recovery in the third quarter of 2017 after a slowdown in 2016 and the first half of 2017, according to a new report from NBK Economics.
According to the report, the recovery is broad based, with improvements in card spending, consumer confidence and household credit, although these indicators rain below the double-digital growth of previous years.
The NBK report noted that consumer spending is nearing the pace it achieved in 201, with credit and debit card spending at point-of-sales machines going up 12.5 percent year-on-year, up from -.7 percent during the third quarter. ATM withdrawals were found to have risen by 8.5 percent year-on-year during the same period.
Durable goods, however, continued to show some weaknesses, with a 5 percent decline imports during the first nine months of the year. The Ara Marketing Research & Consultancy consumer confidence index of 119, however, showed signs of a rebound, with its durable goods sub-index registering the highest three-month average in a year, up 16 percent year-on-year.
Additionally, consumer confidence was found to have gone up for a sixth consecutive month, which appears to be helping household loan growth. Growth in personal facilities has improved to average 7.3 percent year on year between July and October, compared to 6.8 percent in the first half of 2017. The average monthly gain in loans rose to 92 million Kuwaiti dinars ($305 million), above the average of 58 million ($192 million) during the first half of 2017.
Lastly, the report indicated employment growth among Kuwaiti nationals, with 4,200 new jobs in the second quarter of the year, driven by an increase in government hiring. Overall, employment was steady at 2 percent, the slowest pace in more than seven years.
The report predicts that Kuwait’s decision to implement more moderate hikes in utility prices and a government commitment to limit spending cuts will continue to provide support to the consumer sector.