Middle East confidence recovers
Many economies in the Middle East - particularly Qatar and Saudi Arabia - have not suffered
through the global financial crisis. Although Dubai's recent problems have hit the headlines,
the other states in the United Arab Emirates (UAE) are holding up well; and the bailout of
Dubai by Abu Dhabi has had a positive impact on consumer confidence in the former state.
But what did the MasterCard index tell us...?
Indeed, the H2 2009 results of the MasterCard Worldwide Index of Consumer Confidence show that
overall Middle East confidence has recovered from H1 2009 levels and is currently on par with
H2 2008. It is up from 49.9 in H1 2009 to 74.5 in H2 2009.
Generally, sentiment is stronger in Qatar, Saudi Arabia and UAE, with Lebanon and Egypt yet
to recover.
Kurt Thompson, Synovate's CEO of Central and Eastern Europe and the Middle East, says: "It's
no surprise that confidence in Egypt is lagging. That country has a greater level of poverty
than the other Middle East markets surveyed, and state revenues have suffered through drops
in oil prices and in Suez Canal traffic fees.
"However, the findings for both overall consumer confidence and income expectations for
Lebanon are a little more surprising. The Lebanese economy has come through the global
financial crisis in very good shape, with tourism hitting record levels and property prices
booming as political stability improved. However, there has been a return of Lebanese who
lost jobs in Dubai and other Gulf countries, and these respondents would naturally have
lower expectations for their future income."
Overall, people in the Middle East are most confident of a regular income, although the other
aspects of confidence (employment, economy, quality of life and stockmarket) have all dramatically
rebounded too. However, in Lebanon, around one in four expect their income to decrease.
The Middle East savings outlook is largely expected to remain the same over the first half
of 2010. Exceptions to this can be found in Qatar, where over 50% expect to save more, and
conversely in Lebanon, where 41% expect to be saving less.
Thompson says: "The positive outlook for Qatar reflects its buoyant economy, while the gloomier
view from Lebanon mirrors the pessimism we see over future income. Another factor in Lebanon
is that property prices have shot up in the past year, so respondents in that market are spending
more on mortgages or rents."
Like in Asia, dining / entertainment and fashion / accessories dominate purchasing priorities
for the first half of 2010; the only exception to this is Qatar where the buying / upgrading
of home gets higher priority.
When it comes to discretionary spending, the Middle East is largely expected to remain the same
as it was in H2 2009. Both Kuwait and Lebanon show a higher expectation than other markets to
increase this spending, while Qatar has a larger proportion of respondents expecting it to
decrease.
Thompson says this makes sense. "Even though Qatar was one of the most confident places in the
Middle East, there is not necessarily a big need to spend on extras. The Qatar population has
benefited from an extended economic boom. Simply put, the average resident in Qatar has probably
bought everything he or she could possible desire!"
About the MasterCard Worldwide Index of Consumer Confidence H2 2009
This issue of In:fact is based on the MasterCard Worldwide Survey of Consumer Purchasing
Priorities (MWICPP) for Asia/Pacific, Middle East and Africa, conducted by Synovate.
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