A new survey has revealed that the Saudi Arabian consumer remains one of the most optimistic about the state of their personal finances.
The findings are part of third annual Emerging Consumer Survey, conducted by Credit Suisse Research Institute. It points out that 33 percent of respondents expect to see a personal financial improvement. However, this figure was slightly lower compared to last year.
In 2011, about fifty six percent of the respondents expected to improve financially. This optimism was due to significant increases in public sector incomes as the minimum wage for government employees nearly quadrupled. Similar salary jumps were enjoyed by employees in the private sector. Further, the job market in Saudi Arabia enjoyed a boom, along with other social initiatives undertaken by the government.
While incomes are still expected to grow in the Kingdom, it would increase disparities between the rich and poor as the growth will be highest in the upper income levels. This increase in spending power is likely to boost demand for computers, smartphones, fashion apparel and perfumes.
The report also underlines a “huge structural opportunity in the financial industry as the pool of savings deepens further and providing it can be tapped effectively. The implied savings rate stands at around 30 percent of growing incomes, only a whisker away from the trend rate of savings in China”.
The report generalizes that consumer confidence has improved, “but a picture of contrasts.” Out of the 14,200 adults surveyed across eight countries, 37 percent expect their personal finances to improve over the next six months, while 9 percent fear a decline in income. The highest number of optimistic respondents was in Brazil, China, Indonesia and Saudi Arabia.
This positive outlook is largely based on the highest income growth expectations. Most of these optimistic respondents were younger, affluent and typically more-educated consumers. As a result, businesses that target these consumers are also expected to thrive.