Consumer confidence in Egypt strong

Results of the MasterIndex of Consumer Confidence survey for the second half of 2006 reveal that consumer confidence in Egypt is less buoyant than six months ago although overall consumers remains confident.

The current Egypt MasterIndex score of 78.2 out of a possible score of 100 is down 4.8 points on the 83.0 score received six months ago (1H2006). The latest survey conducted in the second half of 2006 measures perception of consumer confidence for the 6 months ahead.  Indications across the region are that consumer sentiment is increasingly more positive and optimistic. In the Middle East and Levant, Egypt was ranked fourth in overall consumer confidence, the same position it held in the last survey conducted six months ago (IH2006).

Commissioned by MasterCard Worldwide and conducted bi-annually in selected markets in South Asia, <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />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 14 years.

In the latest survey the MasterIndex score saw consumer sentiment fall for five out of the six key economic barometers with Employment being the exception, which rose very slightly to 81.5 from 80.5.  Perceptions on Quality of Life registered the biggest slide from 86.5 in the first half to 77.7. The other Index scores showed only marginal declines.  Sentiment on Economy went from 79.3 to 73.0, Regular Income went from 89.9 in the last survey to 83.0 and Stock Market moved from 78.6 to 75.9 in the latest survey.

On a market basis, Saudi Arabia (97.3 vs 88.5 six months ago) topped the list of countries with the highest consumer confidence along with Kuwait where the result stayed the same, (94.5 vs 94.5 six months ago).   These were followed by South Africa (86.5 vs 91.1 six months ago), the UAE (80.0 vs 77.5 six months ago) and Lebanon (67.6 vs 51.3 six months ago).  The India score dropped from 76.4 six months ago to 65.1.

Dr. Nasser H. Saidi, Chief Economist of the Dubai International Financial Centre (DIFC) and a former Minister and Central Bank First Vice-Governor in Lebanon commented on the results of the survey, “The MasterIndex survey participants are generally optimistic about the prospects for the economy, employment, their regular income, the stock markets and the quality of life in the countries of the region. Real GDP for the region has expanded by some 6.5-7% during 2006 and growth is expected at similar rates into 2007. Consumer’s perception of the economy is in most cases inline with the actual economic growth outcomes and is reflecting the ‘feel good’ factor for the economy, regular income and employment.” Dr. Saidi added, “Comparing the consumer economy confidence variable of the MasterIndex with the International Monetary Fund’s (IMF) recent, current and forecasted real GDP growth rates for the economies of the region, we can see that both the consumer sentiment about the economy and the change in the forecasted growth rate tend to move together”.

Overall confidence across the Middle East & Levant (MEL) improved slightly in the latest survey with average confidence increasing from 82.1 six months ago to 83.9. Since MasterIndex began 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 75.2.

Survey results for the larger South Asia, Middle East and Africa (SAMEA) area did show a trend of improvement until this latest survey when the result slipped from 82.2 six months ago, to 80.3. Overall SAMEA has an historical average of 74.7.

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

·         Egypt – With a MasterIndex score of 78.2, consumers in Egypt are less optimistic than they were during the last MasterIndex survey (1H 2006).  Sentiments for 1H2006 were at a record high at 83.0 compared to these results. However, the score is much higher than both, the index a year ago (62.3) as well as the historical average (57.2)    The latest survey scores are Economy (73.0 vs 79.3 six months ago), Quality of Life (77.7 vs 86.5), Employment (81.2 vs 80.5), Regular Income (83.0 vs 89.9) and Stock Market (75.9 vs 78.6).

·         United Arab Emirates - The current MasterIndex of 80.0 is higher than the previous two periods surveyed. Sentiment on Employment (79.0 vs 77.4 six months ago) and Quality of Life (80.6 vs 74.0) significantly improved.  Sentiment on Economy (85.7 vs 84.5), Stock Market (76.5 vs 74.6) and Regular Income (78.4 vs 77.1) remain almost the same. 

·         Lebanon – In the 2H 2005 survey Lebanon consumer sentiments on all five economic factors were optimistic, with optimism dropping off in 1H 2006.  The latest MasterIndex score of 67.6 is a significant increase against 51.3 six months ago and represents an improvement for all key barometers.  The latest survey scores are Economy (71.1 vs 41.2 six months ago), Quality of Life (54.7 vs 46.5), Employment (87.0 vs 69.3), Regular Income (69.3 vs 58.5) and Stock Market (55.7 vs 41.3).

·         Kuwait – The current MasterIndex score in Kuwait of 94.5 is exactly the same as registered in 1H 2006.  The Quality of Life score significantly improved, though the sentiment against the other factors declined marginally, resulting in an unchanged overall MasterIndex score.  The scores were: Employment (92.4 vs 96.5 six months ago), Quality of Life (94.6 vs 87.7), Economy (96.9 vs 97.5), Regular Income (97.2 vs 97.7) and Stock Market (91.4 vs 93.0).

·         Saudi Arabia – The current MasterIndex of 97.3 ranks Saudi Arabia as top in the MEL.  The record all time high was in 2H 2004 with a result of 98.4 but the latest results are a close second.  The current result shows that consumers are highly optimistic.  The current scores are Employment (97.9 vs 85.5 six months ago), Economy (98.8 vs 89.7), Regular Income (96.5 vs 92.8), Stock Market (95.8 vs 82.1) and Quality of Life (97.6 vs 92.3).

·         South Africa – Consumer sentiment in South Africa has dipped slightly from last year’s record highs, although it is still strong in comparison to previous surveys.  The current MasterIndex of 86.5 is down from the score of 91.1 in the last survey six months ago.  The score results are: Employment (83.3 vs 85.3 six months ago), Economy (86.3 vs 91.7), Regular Income (96.8 vs 98.0), Stock Market (83.4 vs 90.9) and Quality of Life (82.8 vs 89.8).

·         India - India’s current MasterIndex of 65.1 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 (77.0 vs 89.5 six months ago), Economy (61.9 vs 75.0), Employment (56.3 vs 61.3), Regular Income (70.6 vs 78.9) and Quality of Life (59.8 vs 77.4).