Kuwait records large deposit rate
KUWAIT: Kuwait enjoys the largest number of deposit accounts compared to three other Gulf Cooperation Council countries, a local daily reported yesterday quoting International Monetary Fund statistics. According to the statistics, there is an average of 1,500 accounts for every 1,000 adult in Kuwait, which means that there are Kuwaitis and expatriates who own more than one bank account to deposit their money. In comparison, the statistics show that there are 1,100 accounts for every 1,000 adults in Oman, 938 for every 1,000 adults in Saudi Arabia and 852 for every 1,000 adults in the United Arab Emirates. The IMF explained that they could not obtain sufficient information from Qatar and Bahrain on that regard. On that regard, banking sector sources agreed that people in Kuwait save more money compared to their peers in the Gulf despite increased spending and purchasing power especially among Kuwaitis.
They mentioned Central Bank statistics which indicated that savings have jumped by more than 89 percent between August 2008 and August 2013, while time deposits rose by 36.7 percent during the same period.
And while indicating that a large part of these savings return to the companies sector, the sources indicated that the general image reflects ‘moving towards saving’ despite the notable decrease in interest rates.
Among reasons they mentioned behind the strong growth in saving volumes at local banks are the relatively high salaries that Kuwaitis receive compared to nearby countries, coupled with lack of investment opportunities which led to increased liquidity in banks instead of funding projects. The sources also mentioned ‘competitiveness’ and offers made by local banks and encourage people to open deposit accounts, as well as the decision of many high-paid expatriates “who prefer to deposit their money in local banks given the circumstances of banks in their home countries”. Furthermore, the sources said that the lack of other saving methods such as insurance policies as well as the government’s guarantee to banking deposits also help saving rates. Despite the positive sides of increased liquidity in local banks, the sources noted that this issue also exposes the fact that private sector stimulation efforts and diversification of national economy remain substandard.
Kuwait Times 2013, Oct 21 2013