World Economy

Saudis Cautious on Spending

Saudis Cautious on SpendingSaudis Cautious on Spending

Saudi Arabia’s consumer confidence score remains flat from the first quarter at 104, according to consumer confidence findings from Nielsen, a global information and measurement company with headquarters in New York.

At the current level, Saudi Arabia is among the 12 countries globally to reach or exceed a score of 100, which is the optimism benchmark, Arabian Business reported.

Job prospect sentiment improved two percentage points (50%), personal finance sentiment remains bright (64% favorable) while immediate-spending intentions have reduced by four percentage points (45%).

“Consumers are still cautious and rationalizing their spending. More than half of the respondents stated that it is not a good time to buy their needs and wants, with one in four respondents said they had no spare cash after paying for basic living expenses” said Arslan Ashraf, managing director, Nielsen Arabian Peninsula and Pakistan.

“They have reduced their spending on out-of-home entertainment, home improvements/decorating and holidays/vacations while continuing to save and invest for retirement. Retail sales of fast-moving consumer goods are still showing a slow growth; however, if market conditions remain as it is, we may see the same level of consumer confidence and therefore some improvement in the long term.”

Consumer confidence in Pakistan remained at 104, unchanged from the first quarter. Egypt’s score of 81 increased three points from the first quarter, while Morocco’s score of 83 declined one point.


  Global Consumer Confidence

Global consumer confidence held steady in the second quarter of 2016 at 98, an index score that was flat from the first quarter. North America was the only region to sustain growth momentum in the second quarter with a three-point confidence increase to 111.

 In North America, US consumer confidence maintained positive momentum in the second quarter, increasing three points to 113 from the previous quarter.

In Asia-Pacific, confidence was relatively stable at 107, a one-point decrease from the first quarter. Japan’s confidence was of particular significance since it decreased four points to 69; it was Japan’s fourth consecutive quarter of declining scores, amid weak consumption and wage growth. Japan’s GDP has been on a declining trend since 1997 and is currently at 0.5%. Japan’s exports fell for the eighth consecutive month in May. China’s score increased one point to 106

In Latin America, confidence remained at 78, unchanged from the first quarter. Brazil’s score was flat at 74, while Peru’s score increased 11 points to 102.

In Europe, Germany’s confidence decreased one point to 96. Meanwhile, Nordic countries and Eastern Europe showed confidence increases in the second quarter.