Consumer Confidence Breaks Through Barriers and Strengthens

ARA Research & Consultancy released its Consumer Confidence Index for Kuwait for April 2025, sponsored by Lexus.

The ARA General Index recorded 117 points, increasing by 5 points at the end of April. This increase compensated for the losses sustained during February and March, bringing the index back to its previously high levels. All sub-indexes that make up the General Index increased between 4 and 22 points, except for the Current Employment Opportunities Index, which decreased by 12 points due to a drop specifically among Arab residents.

Greater Confidence in the Economic Situation Indexes

The Current and Expected Economic Situation Indexes both increased, each adding 4 points at the end of April. This compensated for the losses recorded during the past two months. Although their confidence levels remain below the high figures achieved in the middle of last year, they are still at relatively good levels. This reflects a positive economic climate at both the present and future levels.

The ARA Current Economic Situation Index recorded 110 points, supported by an increase in confidence among Kuwaitis by 8 points, while it remained unchanged among Arab residents. The ARA Expected Economic Situation Index reached 119 points, driven by an increase in confidence among Arab residents by 8 points and a decrease among Kuwaitis by 3 points at the end of April.

There is no doubt that this increase in consumer confidence regarding the economic situation, despite negative global conditions, indicates the presence of several internal positive developments. These include:

- International credit rating agencies maintain Kuwait’s high rating with a stable outlook.

- The government continue to implement projects aimed at developing, expanding, and modernizing various economic sectors, beginning with the oil and renewable energy sectors. This also includes accelerating and supporting private sector development, particularly small and medium-sized enterprises. It is worth noting that the National Fund for SME Development announced an exemption from customs duties.

- Reports from banks and Kuwaiti companies at the end of the first quarter confirmed financial solvency, strong bank profits, and an increase in profitability across most companies.

- Credit granted to the real estate and construction sectors reached 13.3 billion dinars by the end of February, representing an annual increase of 6.21%. Improvement in the real estate sector contributes to recovery across many commercial and professional activities.

Current Personal Income Index Catches Up with Expected Personal Income

The Current Personal Income Index increased to 112 points, with an increase of 9 points at the end of April. This is the highest level recorded since April 2022. Despite some fluctuations, the index has followed an upward trend since the end of 2022. It is now close to the Expected Personal Income Index, which also recorded 112 points with an increase of 4 points.

This is one of the rare occasions in which the Current Personal Income Index increased more than the Expected, which is usually higher. This suggests that respondents’ earlier expectations of improved income have materialized, as confidence in current income now matches that of future income.

This alignment between current and expected income confidence may be due to increased salaries, wages, and benefits in the public sector, as well as in some banks and companies in the private sector. It may also be attributed to the reduction in losses previously experienced in the Kuwait Stock Exchange due to international conditions and its quick return to generating profits.

Employment Opportunities Index Decreases Sharply

The Current Employment Opportunities Index recorded 145 points, decreasing by 12 points compared to March. This decrease resulted from a drop of 31 points among Arab residents, while the index remained stable among Kuwaitis. The index also recorded a sharp decrease among females while remaining stable among males.

ARA analysts note that this index is highly volatile, although it remains within an upward range since the end of 2022.

Highest Level of Purchase Activity in Years

The Purchase of Durables Good Index recovered after the losses recorded at the beginning of the year. It increased by 22 points at the end of April, reaching 126 points, which is the highest level since August 2022. The increase was observed among both Kuwaitis and Arab residents and was similar between men and women.

ARA analysts believe that this increase in purchasing activity, despite price increases resulting from inflation, resembles previous buying waves in some other countries. It is attributed to consumers’ fear of further price increases following additional tariff hikes.

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