GCC: Not Saving Enough For the Rainy Day

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2012 National Bonds GCC Savings Index
2012 National Bonds GCC Savings Index reflect that although the residents of GCC are developing a more positive approach towards savings, they are not saving enough for the future. Image-401K (2012)

Results of the 2012 National Bonds GCC Savings Index reflect that although the residents of GCC are developing a more positive approach towards savings, they are not saving enough for the future.

The index is calibrated by converting respondents’ attitudes into a base value, which can be used to compare countries against themselves or against each other over a period of time. The National Bonds Savings Index was launched in 2010 to study savings patterns and habits among the general public in GCC. The 2012 survey was based on responses of about 1750 residents of Saudi Arabia, Qatar, Bahrain, Kuwait, the UAE and Oman.

According to the survey, residents of Bahrain topped the index and had showed the biggest increase in savings sentiments. Kuwait did not show any improvement or decline in its position and retained its spot on the charts.

However, residents of Qatar continued to show a downward trend as the nation spiralled further lower on the index. An estimated 74 per cent of Saudi nationals stated that they do not save regularly. The same sentiment was shared by around 71 per cent of the population in Kuwait, Qatar, Oman and Bahrain.

The results show that there is growing pessimism towards savings in the region. About 92 per cent of Saudi residents believe that their savings would not be enough to cover their needs in future. Nationals of Kuwait (91 per cent), Bahrain (88 per cent), the UAE (87 per cent) and Oman (85 per cent) also expressed similar sentiments.

The survey also highlighted that although GCC nationals intended to save a part of their income, they were not able to achieve their targets due to higher inflation and other environmental challenges. The results show that about 71 per cent of residents in the UAE, Qatar, Bahrain and Oman, saved lower than their planned amounts. These figures show that there is a dire need to promote education about savings and use of services offered by financial experts.

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