Results of the MasterIndex of Consumer Confidence for the first half of 2005 have revealed that consumers in the Middle East and North Africa (MENA) region continue to have an optimistic economic outlook for the next six months. Egyptian consumers marked the highest improvement in consumer confidence, with an increase of 40% over the past 12 months.
Conducted bi-annually in February and August respectively, the MasterCard International survey analyses consumers’ perceptions on economic conditions over the next six months in seven selected markets in the South Asia, Middle East and Africa (SAMEA) region namely, Egypt, Kuwait, Lebanon, Saudi Arabia, United Arab Emirates, India and South Africa. The survey shows that consumer sentiments have improved in virtually all the surveyed markets compared to the first and second waves of MasterIndex 2004.
For the second time since the MasterIndex survey started, the Kuwaiti consumer scored the highest index in the MENA Region (94.6) with sentiments on regular income and economy extremely positive. The Saudi consumer confidence index remains high though dropping slightly to 93.2 from 98.4 in the preceding period. The index of UAE consumer sentiments has risen by 10% from six months ago to 92.9 from 83.0, demonstrating extremely high expectations of regular income and the economy.
Commenting on the Arab states covered in the survey, David Butter, senior economist and Middle East analyst, Economist Intelligence Unit, based in the UK, said, “High oil prices, resurgent development spending, growth in intra-regional tourism and the growing trends towards holding funds within the region have all contributed towards the mood of brimming optimism in the latest MasterIndex survey of consumer confidence. The three Gulf states included in the survey—Kuwait, Saudi Arabia and the UAE—all record figures on the MasterIndex above 90 out of 100, and all three indices are up year on year.”
“The biggest increase in consumer confidence has occurred in Egypt, up 40% over the past 12 months, reflecting the achievement of the new government in stabilizing the foreign exchange market and reviving the spirits of both the local business community and foreign investors. Consumer confidence in Lebanon languishes below 50, and remains heavily dependent on political developments,” he added.
“It is very encouraging to see the overall score in the Arab countries improving, with an average increase of 20% in one year in consumer confidence. As a knowledge leader in the payments industry, MasterCard continues its commitment to the MENA markets by bringing the only survey of its kind to the Middle East and North Africa region. The diversity of areas covered by the MasterIndex survey helps different stakeholders to extract strategic data and track potential trends in their respective fields,” said Denzil Lawson, senior vice president and general manager, MasterCard International, Middle East and North Africa.
“By generating widespread awareness of economic and consumer lifestyles trends in the region, MasterIndex enhances MasterCard’s established reputation as an organization that provides value to its customer financial institutions, merchants, business partners as well as the overall business community in the region,’ added Denzil Lawson.
The research was conducted in February this year amongst a sample of 400 consumers in each market. In total, 2,845 respondents were surveyed. Consumer sentiment in the SAMEA region has slightly improved reaching 79.1 from 69.8 in the second half of 2004 and looking specifically at the MENA region has improved reaching 79.7 from 70.2 in the same period. This slight improvement is particularly apparent on virtually all five of the MasterIndex factors, namely Economy, Employment, Stock Market, Quality of Life and Regular Income.
Highlights of the MasterIndex of Consumer Confidence findings in the SAMEA Region:
Kuwaiti consumers (94.6) remain exceedingly optimistic. Sentiments on all the five MasterIndex economic factors are at a record high with those on Regular Income (98.3) and Economy (96.4) just close to an index score of 100, demonstrating that consumer confidence in this market is extremely positive.
Saudi consumers (93.2) maintain a positive outlook for the next six months despite a five point drop in their consumer sentiments index compared to the preceding period (98.4). The current high MasterIndex of 93.2 supported by equally strong positive sentiments on all the five economic factors reassures its position as one of the “best and brightest” markets in the region.
United Arab Emirates consumers (92.9) are more confident about the next six months compared to the preceding period (83.0) and a year ago (87.1). Sentiments on all the five MasterIndex factors are at an all time high. Particularly noteworthy are the exceedingly positive expectations of Regular Income (98.9) and Economy (97.9).
Egyptian consumers (60.7) have become more optimistic about the next six months compared to the preceding period (37.0) and a year ago (43.2). Consumer outlook on all the five MasterIndex economic factors have improved significantly. Consumers in this market are fairly optimistic about Economy (58.2), Quality of Life (59.2), Stock Market (64.2) and Regular Income (74.6).
Lebanese consumers (44.0) remain the most pessimistic in the SAMEA Region about the next six months despite having made a significant improvement compared to the previous period (32.5) and a year ago. Sentiments on Stock Market (50.7) have slightly declined compared to the previous two waves. Sentiments on Employment (42.2), Economy (38.0) and Quality of Life (40.3) remain pessimistic.
