Kuwait – Mubasher: Kuwait’s consumer sector has enjoyed significant stability so far in 2017, after seeing a slowdown or ‘moderation’ last year, despite strong household income and rising employment.

Despite the stability, consumer confidence “remained noticeably weak in 2017,” a new report by NBK Capital showed, noting that a rise in card spending “has bounced back though it remains far below the double-digit growth of the previous years.”

Employment among Kuwaitis also supported the country’s consumer sector, backed particularly by steady government hiring, the report showed.

“Consumer spending continued to moderate in Q1-17, but maintained a decent pace,” NBK said, noting that spending on credit and debit cards at point-of-sale (POS) machines retreated to 6.9% year-on-year during Q1-17, down from 9.1% on an annual basis in Q4-16.

Weaker growth in terms of imports also contributed to the Kuwaiti consumer sector’s moderation, as imports remained almost unchanged in Q1-17, after adding only 0.2% year-on-year.

Motor vehicle imports were weak, although the 3% year-on-year was considered “an improvement”, by NBK Capital, from declines witnessed in previous quarters.

Despite the improvement in consumer confidence in recent months, it “remains somewhat soft,” the report said, indicating that confidence had fallen to 99 in May, although it had been improving since Q3-16.

“The index has been on a downward trend for four years and fell more rapidly in 2016 after the government hiked fuel prices. It has since recovered somewhat, though the general index’s three-month average in May was still down 2.5% year-on-year,” the report showed.

According to NBK Capital, the durable goods segment of the sector continued to be “particularly disappointing” especially after the three-month average fell 9% year-on-year.