Revolution has boosted consumer confidence in Egypt
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Steve Chiotakis: Tomorrow, we’ll get a final reading on how consumers are feeling here in the U.S. So far gas prices haven’t worried consumers too much. Of course consumer confidence is a big economic indicator all over the world. In Egypt, there’s new data that political upheaval can actually boost consumer confidence.
Marketplace’s David Brancaccio is in the Middle East. And in this morning’s Economy 4.0 series he’s looking at ways the economy can better serve more people. Good morning David.
David Brancaccio: Good morning to you, Steve.
Chiotakis: So political uncertainty, I would imagine, would make consumers more cautious, right?
Brancaccio: Nielsen — market researchers — have found just the opposite in the case of Egypt. This spring, consumer confidence posted its biggest lead of any country in the world, in Egypt. Researchers say it is the promise of new freedoms — political, social and, yes, commercial. If the Egyptian revolution was about forcing the country to serve more people, rather than an entrenched elite, you can see how that might give people the confidence to spend more.
Chiotakis: And now you were in Egypt, talking to folks about the economic future there. What were they telling you?
Brancaccio: What I found was guarded optimism — emphasis on the guarded. People acknowledged the revolution wasn’t a single event but an ongoing process, and many have questions about just how far military leaders are willing to go. Now there’s no question that economic output in Egypt is taking a major hit this year. Although President Obama pledged money and loan forgiveness, Saudi Arabia’s giving more, the World Bank is putting a ton in. And the government of Qatar is talking $10 billion of investments in Egypt.
Chiotakis: Now did that consumer confidence survey, David, look at other Middle East countries?
Brancaccio: Well they didn’t get data in some key areas — Libya, for obvious reasons; also Tunisia and Syria were not in what was an online survey. Now I’m talking to you from Dubai, and the Nielsen company did find confidence March through April of this year spiking upwards strikingly in this country, the United Arab Emirates. It’s, I think, about the sense that the global financial crisis has receded, and also driven by the fact that high oil prices are a good thing if you are, like the UAE, a cellar of oil. And an example of consumer confidence that I spotted just the other day: an ATM-like machine here that dispenses, not cash, but — wait for it, Steve — gold bars, for about $1,600 an ounce. A bit high, I would say.
Chiotakis: All right, Marketplace’s David Brancaccio in Dubai. Thank you so much.
Brancaccio: My pleasure.