Saudi Arabian consumers are in the midst of an unprecedented spending spree, with record amounts of cash being withdrawn from the kingdom’s ATMs.
An average of 54 billion riyals (Dh52.88bn) was taken from cash machines each month over the summer, while a further 10.4bn riyals went through electronic sale machines monthly in Saudi retail outlets, according to figures from the Saudi Arabian Monetary Authority.
That equates to a cash withdrawal of nearly 2,000 riyals per month for each man, woman and child of the country’s estimated 27.2 million population. The minimum monthly wage in the country is 3,000 riyals.
The figures were quoted in a report by Deutsche Bank on the Saudi consumer sector, which highlighted the soaring living standards of many Saudis since the government began to pump money into the economy last year.
“Saudis are spending record amounts of cash on electronics and telecommunications, clothes and entertainment, as well as on books and culture,” according to Marc Hammoud, an analyst at the bank.
The recent figures are the highest since a one-off spike in spending in April last year, when the government gave public sector employees a two-month salary bonus and most of the private sector followed suit.
Mr Hammoud said such cash withdrawal levels were high by global standards and a good indicator of the Saudi consumer boom but added that they were unlikely to tell the full story.
“You have to take out about a third of the population who are too young to have bank accounts. And some 50 per cent of Saudi households don’t have a bank account. It is still a very cash-based society,” he said.
With new employment measures for citizens and greater lending to corporates and consumers, “optimism and spending intentions are robust across the income scale”, said Mr Hammoud. Consumer lending is now about 30 per cent of bank lending.
Despite the consumer boom and growth in credit, inflation remained in check below 4 per cent, said Deutsche Bank.
Rising incomes and living standards were in contrast to an overall fall in global wealth unveiled in a report by Credit Suisse Research Institute. Since last year, average global household wealth fell by 5.2 per cent, the report found.