Kuwait Retail Report Q2 2016

Kuwait Retail Report Q2 2016

BMI View: Kuwait's economy has been forced to shift its focus dramatically, following the recent drop inoil prices. While the country has a robust financial foundation, the economy is not diversified and this willminimise the possibility of sizable income gains in Kuwait households. The non-essential purchases will beimpacted the hardest, with many Kuwaiti's shifting a large part of their budget to the housing sub-sectorthroughout our forecast period.

Key Updates and Forecasts

We expect household consumption to continue to climb, thanks to increasing affluence and wages.

The share of households in the USD50,000 plus income bracket will continue to expand, reaching 16.4%in 2016.

Kuwait's population will grow rapidly by 2.1% annually throughout the forecast period, due to growingimmigration of both skilled and unskilled labour.

Housing & utilities will be the largest sub-sector of household spending, accounting for approximately29.3% of the total in 2016, due to rising rental prices and increased spending on houses and apartments.

We expect total household spending growth to pick up notably over our forecast period and average 4.4%per annum between 2016 and 2020. Increasing household incomes bodes well for the retail sector on thewhole however non-essentials spending will post much slower growth than that of essential spending.