Consumer confidence in Bahrain on the rise

Bahrain has been ranked joint second among GCC nations when it comes to consumer confidence, according to a new report.

The latest edition of the Consumer Confidence for the Gulf highlights that spending patterns are likely to be elevated in the second half of the year if the pandemic is contained in the six nations.

Spending

Released by US-based research group The Conference Board’s newly-launched Gulf Centre in Kuwait, the report highlights that consumers in Saudi Arabia and the UAE (nationals and expats) were among the most confident.

Three parameters considered in the report were job prospects, personal finances and spending intentions.

GCC nationals and expats living in Gulf countries shared their feedback in the survey conducted by the research organisation and the six nations were ranked between 62 and 130 points.

A reading above 100 indicated that there were more optimistic consumers than pessimistic ones, while a reading below 100 indicated the opposite.

Among the Gulf countries, Saudi Arabia and the UAE have the highest consumer confidence (130) followed by Bahrain and Qatar (both on 104 points), Oman (98) and Kuwait (96).

The report outlined that Bahrainis were the main ‘drivers of confidence’ resulting in a rise of consumer confidence in the second quarter of the year, while expats were less bullish.

Consumers in Bahrain said they were least optimistic about their job prospects, as they listed job security (26 per cent) as their main concern, followed by health (18pc) and the economy (14pc).

“Expats were more concerned about job security, while nationals were more worried about their health and the economy,” outlined the report. “As a result, expats reduced their discretionary spending, saved more and postponed paying off loans and credit cards.”

On the contrary, the report revealed that Bahrainis increased their spending with holidays, clothes and outdoor entertainment being the major drivers. However, Bahrain’s consumer confidence changed from 97 in the first quarter of the year to 104 in the second quarter, with expats spending decreased from 97 to 85 over the same period.

“Consumer confidence in Bahrain improved by seven points to reach 104 in Q2 2021,” stated the report. “Nationals were the main driver of confidence in the country exhibiting increased optimism towards their personal finances, spending intentions and job prospects.

A breakdown of consumer confidence in Bahrain shows expats were listed under ‘pessimistic consumers’ as they were concerned about job prospects and their spending intentions

“The continuous support that Bahrainis received from the government, in particular 50pc payments of salaries in Covid-19 impacted sectors, and the creating of a national employment programme aiming at creating private sector jobs – and training the workforce – helped boost confidence.”

The government has pumped nearly BD5 billion as rescue package to mitigate Covid-19 impact since last year that included waiving government levies, paying wages of citizens in the private sector, among other aid.

The report adds that overall expats were the least confident in the region, with confidence at 85 points in the second quarter of the year from 97 in the previous quarter (in Bahrain).

Concerns

“The exodus of expat labour and minimal issuance of visas limited job prospects for expats, resulting in little optimism about their financial prospects and hampering spending,” added the report.

The findings outlined that consumer confidence in the coming months is likely to ‘remain frail’ in the upcoming quarters due to renewed Covid-19 restrictions, especially hitting the tourism segment mainly from Saudi Arabia, and further negatively impacting the summer season.

The report states that inflationary pressures will remain elevated throughout the year stressing that food and fuel subsidies across the region may limit the concerns about rising prices for the rest of 2021. However, concerns about rising utility prices were ‘more prominent in Bahrain and Oman than other economies’, added the report.

It further forecast for an economic revival starting from the second half of the year and into 2022.

Source: https://www.gdnonline.com/Details/963410/Consumer-confidence-in-Bahrain-on-the-rise