Saudi Arabia has been ranked as the fifth among nine emerging markets in terms of consumer confidence, according to the latest survey by Credit Suisse.
The annual survey, which profiles consumer sentiment and its drivers across the emerging world, conducted nearly 16,000 face-to-face interviews in Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa and Turkey.
It found that there was increased optimism among consumers in the Kingdom.
The highest income earners (those earning more than SAR25,000 a month) were the most optimistic about the state of their personal finances, a trend continuing for three consecutive surveys.
However, up to 24 per cent of those earning less than SAR5,000 a month also expected their personal finances to improve over a six month period.
“This can arguably be attributed to the Ministry of Labour’s initiative from early 2014 to raise the minimum wage,” it said.
The study also found that market penetration in Saudi was the highest among all the economies surveyed, with over 90 per cent penetration in items such as computers, cars and smartphones. All 1,583 respondents surveyed in Saudi confirmed that they own a mobile phone.
“High penetration rates such as these lead us to believe that the market opportunity now lies in the trading up of goods. This can be observed by the continued strong momentum in smartphone penetration, which has risen from 68 per cent in our 2012 survey to 96 per cent this year,” the report stated.
However, Credit Suisse also noted that the survey was conducted at the time of the fourth quarter drop in the oil price, with the full effects likely to impact consumers more substantially.
Overall, India was found lead the ranking, moving up from fourth in last year’s study.
Giles Keating, global head of Research for Private Banking and Wealth Management, said: “The survey shows the contrasting impact of the oil price collapse on emerging markets.
“Consumer sentiment in Russia and key Latin American economies is under pressure, in contrast to India where the consumer looks robust, helped by reforms. Overall, structural investment opportunities in these economies have not disappeared, but nor have their vulnerabilities.”