Consumer Confidence in Saudi Arabia Continues to Be Strong

Consumers in Saudi Highly Optimistic about their Future.

Jeddah,- Results of the MasterIndex of Consumer Confidence survey for the first half of 2007 reveal that consumers in Saudi Arabia continue to be highly optimistic about their future and are confident on all five economic factors surveyed for MasterIndex, namely Employment, Economy, Regular Income, Stock Market and Quality of Life.

The current Saudi Arabia MasterIndex score of 92.0 out of a possible score of 100 represents a slight decrease from the record high of 97.3 registered six months ago, however it shows that consumers are still very highly optimistic.

The latest survey conducted in the first half of 2007 measures perception of consumer confidence for the 6 months ahead. In the Middle East and Levant (MEL), Saudi Arabia ranks second in overall consumer confidence, losing one rank to Egypt which registered a record increase compared to the last survey.

Commissioned by MasterCard Worldwide and conducted bi-annually in selected markets in South Asia, Middle East and Africa (SAMEA), the survey analyses consumers’ perceptions of economic conditions over the six months ahead. The MasterIndex has a range of 0 to 100 with 50 as the mid-point. A score above 50 indicates that consumers are optimistic about the economic climate, while a score below 50 signals that consumers are pessimistic about the economic situation.

The countries surveyed are Egypt, Kuwait, Lebanon, Saudi Arabia, UAE, South Africa and India. The scores are based on respondents’ answers to questions relating to five key economic barometers: Employment, Economy, Regular Income, Stock Market and Quality of Life. Bi-annual MasterIndex surveys have been held across SAMEA for the past three years and across Asia Pacific for the last 15 years.

In the latest survey, the MasterIndex scores for all key barometers decline slightly: Perceptions on Quality of Life register at 94.5, a decline of 3.1 points (97.6 in 2H2006), Regular Income is at 94.0 as compared to 96.5 six months ago, sentiment on Employment declines from 97.9 in 2H2006 to 91.3, Economy falls from 98.8 six months ago to 90.5 in the current survey and Stock Market registers at 89.8, as compared to 95.8 in 2H2006.

On a market basis, Saudi Arabia follows Egypt which tops the list of Middle East countries with the highest consumer confidence (94.3 vs. 78.2 six months ago) and registers the biggest increase as well. Egypt and Saudi Arabia are followed by Kuwait (91.6 vs. 94.5 six months ago), the UAE (88.8 vs. 80.0 in the second half of 2006), South Africa (80.7 vs. 86.5 six months ago), India (63.6 vs. 65.1 six months ago) and Lebanon with the sharpest decrease from 67.6 in the second half of 2006 to 38.6 in the current survey.

Overall confidence across the Middle East & Levant (MEL) stays at the same level of confidence with 83.6 as compared to 83.9 in the last survey. Since the MasterIndex initiative was introduced in 2004, overall consumer confidence in MEL has increased steadily from the first average score of 66.1 and currently has an historical average of 76.7 Survey results for the larger South Asia, Middle East and Africa (SAMEA) region showed a trend of improvement until this latest survey when the result further slipped from 82.2 in the first half of 2006 to 80.3 six months ago to now 79.3. Overall SAMEA has an historical average of 75.6.

SAMEA Highlights of the 2H, 2006 MasterIndex of Consumer Confidence Findings

• Saudi Arabia – The current MasterIndex of 92.0 has decreased from the score registered six months ago (97.3) and ranks Saudi Arabia as the second in the MEL. The record all time high was in 2H 2004 with a score of 98.4. The results have since shown a regular trend of increasing respectively decreasing confidence each wave. The current result shows that consumers are less however still highly optimistic. The current scores are Employment (91.3 vs. 97.9 six months ago), Economy (90.5 vs. 98.8), Regular Income (94.0 vs. 96.5), Stock Market (89.8 vs. 95.8) and Quality of Life (94.5 vs. 97.6).

• United Arab Emirates - The current MasterIndex of 88.8 is higher than the previous two periods surveyed (80.0 in 2H06 and 77.5 in 1H06). Sentiment on Employment (95.2 vs. 79.0 six months ago), Regular Income (92.2 vs. 78.4) and Economy (96.0 vs. 85.7) significantly improved, followed by Stock Market (81.5 vs. 76.5). Quality of Life dropped from 80.6 in the second half of 2006 to 79.1 in the current survey.

• Egypt – With a MasterIndex score of 94.3, consumer confidence in Egypt is at a record high, increasing from 78.2 in the second half of 2006. The trend analysis shows a steady increase in consumer confidence from 43.2 in the first half of 2004 to the record high of 94.3 in the current survey. The latest survey scores are Economy (97.5 vs. 73.0 six months ago), Quality of Life (90.6 vs. 77.7), Employment (94.6 vs. 81.2), Regular Income (96.5 vs. 83.0) and Stock Market (92.4 vs. 75.9).

• Lebanon – In the 2H 2005 survey Lebanon consumer sentiments on all five economic factors were optimistic, with optimism dropping off in 1H 2006 and increasing again in 2H 2006 to a MasterIndex score of 67.6. The current score represents a sharp decrease in the overall score (38.6) and all key barometers. The latest survey scores are Economy (43.9 vs. 71.1 six months ago), Quality of Life (22.6 vs. 54.7), Employment (38.3 vs. 87.0, Regular Income (67.9 vs. 69.3) and Stock Market (20.5 vs. 55.7).

• Kuwait – The current MasterIndex score in Kuwait of 91.6 is slightly lower than the score of 94.5 in 2H2006. The Employment score slightly improved from 92.4 six months ago to 94.1, though the sentiment against the other factors declined marginally with the following scores: Quality of Life (93.3 vs. 94.6 six months ago), Economy (93.7 vs. 96.9), Regular Income (93.6 vs. 97.2) and Stock Market (83.3 vs. 91.4).

• South Africa – Consumer sentiment in South Africa has dipped from the record high a year ago (91.1), although it is still strong in comparison to previous surveys. The current MasterIndex of 80.7 is down from the score of 86.5 in the last survey six months ago. The score results are: Employment (81.2 vs. 83.3 six months ago), Economy (88.2 vs. 86.3), Regular Income (98.3 vs. 96.8), Stock Market (66.8 vs. 83.4) and Quality of Life (77.9 vs. 82.8).

• India - India’s current MasterIndex of 63.6 is a significant reduction from last year’s result of 76.4 which was the strongest on record. The score results are: Stock Market sentiment (76.8 vs. 77.0 six months ago), Economy (56.1 vs. 61.9), Employment (49.4 vs. 56.3), Regular Income (67.7 vs. 70.6) and Quality of Life (67.8 vs. 59.8).