Kuwait consumer spending on the rise
Kuwait, May 10, 2014
Consumer spending in Kuwait remained relatively robust, and continued to grow more rapidly than the rest of Kuwait’s economy, said a report.
However, it has begun to moderate as well. The point-of-sale transactions (POS) in the fourth quarter of 2013 were up by 14 per cent from a year ago, the slowest pace in over a year, according to a report by National bank of Kuwait..
If consumers’ cash withdrawals (ATM) are also included, spending softened to 9.1 per cent in the final quarter of 2013 in Kuwait, said the country's top lender.
POS spending growth also maintained a robust pace despite some moderation, as the benefits of the 2011 and 2012 salary hikes faded.
While household debt growth remained in the double-digits, it has moderated over the last twelve months.
Meanwhile, employment growth appeared stronger in the fourth quarter following a bout of weaker figures earlier in 2013. At the same time, accelerating economic growth appears to be boosting skilled expat employment.
The household’s debt growth slowed to 15.1 per cent through February, down from a 18.7 per cent peak in June last year.
According to NBK, the personal facilities excluding credit for the purchase of securities rose to KD8.7 billion ($31 billion). Much of the weakness in February’s debt increase was due to the settlement and write-off of Family Fund loans which began that month.
"We estimate that the family fund shaved KD50 million off household debt in February; we expect March to see a still larger impact," it said.
According to NBK, the employment among Kuwaiti nationals remained relatively steady, though the latter part of 2013 saw some pickup.
First-time civilian hires (first-time PIFSS registrations) amounted to 12,300 in 2013, down from just over 13,000 the prior year. Still, net civilian employment growth was steady at 4.4 per cent y/y (304,500 total employed). Though the number of first-time hires by private employers was stable, net employment growth in the sector picked up to 8.1 per cent from 5.9 per cent a year ago, said the report.
Skilled expat job growth has also been accelerating, seeing its strongest pace since 2009 on the back of brisker economic growth.
Employed non-Kuwaitis with at least a secondary education rose by 10,300 during 2013, more than double the figure the year before. Both the private and public sectors are behind this trend, it added.
On the future outlook, NBK said the consumer sector is expected to continue to moderate in 2014 from a faster pace in previous years, though growth will remain healthy.
Household debt growth is expected to moderate further while measures by the government to boost household income are likely to be limited. Still, employment growth should pick up pace, supported by the improving economic outlook this year and next, it added.-TradeArabia News Service