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Jeddah - Yasmine El Tohamy - DUBAI: Consumers in Saudi Arabia are among the most confident in the world that the economy will recover after the slow down because of the coronavirus disease (COVID-19), but they are still reining in spending while the emergency lasts.
That is the main finding of a survey conducted in the Kingdom by international consulting firm McKinsey as part of a global analysis of consumer sentiment in light of the virus’s impact on normal economic life.
There is also a big increase under way in e-commerce and online entertainment as travel restrictions affect everyday activity.
The survey, conducted last week, found that 58 percent of citizens and residents were confident that the economy would rebound within two to three months and would grow just as strong or stronger than before the virus appeared.
That was the highest of ten countries cited by McKinsey. Italy, which has experienced the most severe outbreak in Europe, had the lowest level of optimism, with only 13 percent of Italians believing things would get better quickly after the outbreak.
Only 12 percent of Saudis agreed that COVID-19 would have a “long lasting impact on the economy and show regression or fall into a lengthy recession.” Consumers in the UAE were almost as optimistic as Saudis, with 57 percent confident of a rapid rebound and 15 percent thinking things would get worse.
But a large number of people in the Kingdom said that the outbreak would change their personal and family spending patterns during the crisis. Half of respondents told McKinsey that they worry about the impact of the illness on their overall finances, with 51 percent cutting back spending or saying they have to be careful abut how they sodden their money.
About 36 percent said that uncertainty about the economy was preventing them from making purchases or investments they would otherwise make, but only 16 percent said their income had been negatively affected by the crisis.
There will be a greater focus on essential items. Some 30 percent will increase the amount they spend on food and drink over the next 12 weeks, while beauty and cosmetics sales can expect to see a downturn, with 55 percent saying they will decrease spending on these products.
With widespread curfews in operation in the Kingdom, online consumption is expected to grow significantly. Some 24 percent of those polled said they would buy groceries online over the next two weeks — five times more than before — while 55 percent said they would spend more money on entertainment online. More than 40 percent expect to spend more time using social media and the Internet for education and reading.
Abdellah Iftahy, the McKinsey partner who led the research, said: “The circumstances have required consumers to change their behaviors rapidly, both in terms of consumptions and channels, accelerating the penetration of online industries, such as e-grocery.”
A second survey will be conducted next week to enable comparisons to be made as the outbreak unfolds across the region, McKinsey said.
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