Although a major economic force in the GCC, Kuwait is witnessing a persistent decline in economic sentiment. November’s net positive value of 65.9% represents a notable drop from the 71.3% recorded in October – itself a decline from 75.2% in September (a series high). This amounts to an almost 10% regression in consumer sentiment over the past three months.
Private business confidence, in particular, has seen a sizeable decline from a series high of 72.7% in September to 67.3% in October, followed by a precipitous drop to 60.3% in November. The deterioration in business confidence is compounded by the country’s slower-than-expected economic recovery, political/parliamentary issues, as well as access to fiscal funds and general anxiety in the private sector.
This also manifests in the consumer sentiment index of the economy, which is, once again, largely driven by government initiatives. The confidence reading in November stands at 68.2% (down from 71.1% in October) and comprises the lowest reading since July of this year, during a sustained increase in economic positivity as the summer drew to a close.
An identical trend is being observed in the employment confidence index, which is even more concerning, considering the fact that Kuwait seldom experiences major fluctuations. In fact, June demonstrated a series high, net positivity of 94.3% for employment sentiment. This value currently sits at a mere 83.8% – a more than 10% drop. The decline may signal the inception of a troubling trend for Kuwait, as the first major downward movement in this index since March 2020.
Overall, alertness to consumer concerns is advised, as Kuwait experiences negative sentiment related to its economy and political environment. In this context, any shockwaves caused by the external/global factors addressed above may also impact Kuwait’s confidence index faster and more gravely than those of its Saudi and Emirati GCC partners.