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Thursday , August 18 2022

Consumer spending up by 34% at end of 2021

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KUWAIT CITY, Feb 7: The Central Bank of Kuwait data shows consumer spending of citizens and residents in Kuwait at the end of 2021 jumped by 8.7 billion dinars, or 34%, to a record and historical level, compared to spending levels during 2020, reaching about 34.3 billion dinars at the end of last year, compared to 25.6 billion dinars at the end of 2020, reports Al-Anba daily. This is compared to spending in 2019, before the outbreak of the coronavirus pandemic, spending also recorded a 47% jump, with a value of 11 billion dinars, compared to spending of 23.3 billion dinars during 2019, according to the data, a copy of which has been obtained by the daily.

Spending
This record spending by citizens and residents during the past year coincides with the end of the strict restrictions imposed during 2020 to contain the spread of the Covid-19 pandemic, in addition to postponing citizens’ premiums for a full year, and residents’ premiums on loans for a period of 6 months, which provided great liquidity to the market and enhanced consumer spending. The fourth quarter of last year witnessed the highest level of consumer spending in 3 months, amounting to about 9.5 billion dinars, which coincided with the opening of Kuwait Airport and the operating capacity returning to normalcy, which boosted the growth of consumer spending during the last 3 months of the year. During the past year, the consumer spending of citizens and residents, through points of sale, cash withdrawals and websites, inside Kuwait amounted to about 32.7 billion dinars, while their spending through these channels outside Kuwait amounted to about 1.5 billion dinars

Jump
In a related context, consumer loans, directed to the purchase of durable goods and cars, witnessed an annual jump at the end of last year by 15%, with a value of 238 million dinars, to reach 1.84 billion dinars, compared to 1.6 billion dinars at the end of 2020. On the other hand, the installment loans granted to citizens for the purpose of renovating or purchasing private housing, witnessed an increase of 9% during 2021 at a value of 1.68 billion dinars, to record a level of 14.39 billion dinars at the end of last December, compared to 12.7 billion dinars at the end of December 2020. Thus, the credit granted by Kuwaiti banks by the end of 2021 recorded a remarkable increase of 6.3% to reach a new record level of 42.28 billion dinars, an increase of 2.52 billion dinars, compared to its levels at the end of December 2020 of 39.76 billion dinars. Loans used to purchase of securities also witnessed an increase at the end of last year by 9%, with a value of 233 million dinars, to record a level of 2.812 billion dinars at the end of December 2021, compared to 2.58 billion dinars at the end of December 2020.

Increase
The oil and gas sector also witnessed an increase during the past year by 14.3%, with a value of 267 million dinars, to record a level of 2.14 billion dinars at the end of last December, compared to 1.87 billion dinars at the end of December 2020. With regard to deposits in the Kuwaiti banking sector, deposits in Kuwaiti banks decreased by 1.57% at the end of last year, with a value of 713.5 million dinars, to reach the level of 44.56 billion dinars, compared to their levels recorded at the end of 2020, amounting to 45.27 billion dinars, and also decreased by 0.57% per month, compared to 44.82 billion dinars last November. This decline in deposits in the Kuwaiti banking sector was driven by a 7.2% decline in government deposits, at a value of 571 million dinars, during the past year, bringing the balance of government deposits with Kuwaiti banks to 7.37 billion dinars at the end of last December, compared to a balance of 7.94 billion dinars at the end of 2020.

Declined
At the level of the private sector, deposits in dinars declined during 2021 by 0.86%, with a value of 306 million dinars, bringing the balance of private sector deposits to 34.96 billion dinars at the end of last December, compared to a balance of 35.27 billion dinars at the end of the fourth quarter of 2020, and also declined at the monthly level by 0.52% compared to At 35.15 at the end of last November. While the private sector deposits in foreign currencies increased by 8% during the past year, with a value of 164 million dinars, bringing the balance of deposits in foreign currencies to 2.22 billion dinars at the end of last December, compared to 2.059 at the end of the fourth quarter of 2020, while it decreased on a monthly basis by 1.8%, compared to 2.26 billion dinars at the end of November. The profits of 32 exchange companies operating in the local market increased by more than 150% at the end of 2021, as they recorded net profits of 45 million dinars, compared to 17.9 million dinars just before the start of the Corona pandemic, and if the comparison is on an annual basis, specifically with 2020, the profits increased 24%, including its value of 8.7 million dinars, to register a net profit, compared to 36.3 million dinars in 2020.

Profits
The increase in profits was driven by a record increase in revenues, which rose from the level of 61.4 million dinars at the end of 2019 to 90.11 million at the end of 2021, and also witnessed an increase in its rates when compared to 2020, which amounted to 79.66 million dinars. This comes as the exit of 6 exchange companies from the market mitigated the increase in expenses against revenues, as expenses rose to 45 million dinars at the end of December 2021 for 32 companies, compared to 43.36 million dinars for 38 companies at the end of December 2020.