The political and economic environment negatively impacted the saving and spending patterns of the Egyptian people during Q4 2012, with consumer confidence dropping nine points to 94, according to a report issued by global and information and measurement company Nielsen.
The report said in Egypt, optimism for local job prospects lowered by nine points in Q4 to 50% and positive perceptions for personal finances dropped seven points to 57%, compared to Q3 of the same year.
Of those surveyed, 64% believed that buying both discretionary and non-discretionary items over the next year would be limited, an increase from 57% in Q3.
“The last two years were see-saw years when emotions and consumer sentiments in Egypt went up and down in reaction to the fast-changing political and economic landscape,” said Ram Mohan Rao, managing director of Nielsen Egypt.
“The latest confidence drop in Q4 is an indication of how consumers are interpreting the recent tough economic steps the government is contemplating to implement for the long term good of the economy,” he added.
“However, if people do not see any quick improvement in the economy, then it is possible that in the short term, consumer confidence will continue to slide.”
Positive perceptions of local job prospects and the state of personal finances dropped throughout the Middle East, compared to Q3, with the exception of Israel, which reported increases in both.
Among Middle East and Africa respondents, 22% said job security was the biggest concern in Q4, followed by fears over the economy as expressed by 12% of those surveyed, according to the report.
The Nielsen Global Survey of Consumer Confidence and Spending Intentions measures consumer confidence, major concerns, and spending intentions by surveying more than 29,000 respondents with internet access in 58 countries. Consumer confidence levels above 100 shows optimism and below that reflect pessimism.
Global consumer confidence went down one index point to 91 in Q4 2012, as 33 of 58 countries showed lower confidence levels than in Q3. Nineteen countries witnessed an increase in consumer confidence while six remained unchanged, according to findings from Nielsen’s report. Global flexible saving and spending patterns also declined across the majority of sectors in Q4.
“Consumers around the world grappled with increasing economic concerns as the euro zone crisis spreads from troubled to core countries, the US fiscal cliff threat loomed large, and China’s rising inflation sparked monetary policy action,” said Dr Venkatesh Bala, chief economist at the Cambridge Group, in Nielsen’s blog.
“Consumers are proceeding with caution in 2013 and showed renewed discretionary spending restraint in the last quarter amid further global economic and political uncertainty,” he added.