New data from the Central Bank of Kuwait (CBK) reveals a contrasting trend in spending patterns between Kuwaitis and expatriate workers during the first nine months of this year. Kuwaitis splurged on travel and tourism, while expatriates spent less on remittances to their families back home.
According to the CBK, Kuwaitis spent over KD3.5 billion on travel and tourism abroad during the first nine months of this year, marking a 12.4 percent increase from the previous year’s KD3.14 billion expenditure. The data also highlights a significant surge in travel and tourism spending during the third quarter, which is typically a period of higher travel activity. In the third quarter alone, Kuwaitis spent approximately KD1.15 billion, slightly higher than the KD1 billion spent in the second quarter and the KD1.3 billion spent in the first quarter.
The surge in spending can be attributed to pent-up demand following nearly two years of travel restrictions and precautions due to the COVID-19 pandemic. Kuwaitis, like many people around the world, have been eager to explore new destinations and enjoy leisure activities that were put on hold during the pandemic. The increase in travel and tourism expenditure reflects a desire to make up for lost time and experience the joys of travel once again.
On average, Kuwaitis spent around KD392 million per month during the January to September period in 2023. This robust spending not only contributes to the global travel and tourism industry but also supports the economies of the countries visited by Kuwaiti travelers.
In contrast, remittances by expatriate workers saw a significant decline during the same nine-month period. Foreign remittances from Kuwait totaled KD2.97 billion, a sharp drop of 30 percent compared to the KD4.23 billion remitted in the same period in 2022. The decline in expatriate remittances has been a consistent trend throughout the year, with transfers decreasing from approximately KD1.22 billion in the first quarter to KD892 million in the second quarter, and further dropping to KD868 million in the third quarter.
The decrease in remittances can be attributed to various factors. The ongoing impact of the pandemic has led to economic uncertainties and job losses, affecting the income of expatriate workers. Additionally, the implementation of stricter regulations and policies related to remittances may have also played a role in the decline. These measures aim to regulate the outflow of funds and ensure that remittances are conducted through legal channels.
On average, expatriates sent around KD330 million per month in remittances during the January to September period, a significant drop of KD140 million compared to the monthly average of KD470 million in the same period last year. The decline in remittances not only reflects the economic challenges faced by expatriate workers but also has implications for the receiving countries, as remittances often contribute to their economies.
The divergent spending patterns between Kuwaitis and expatriates highlight the different priorities and circumstances of these two groups. While Kuwaitis have been able to indulge in their travel aspirations, expatriate workers have faced financial constraints and uncertainties. These trends also reflect the broader impact of the pandemic on global travel and migration patterns.
As the world continues to navigate the challenges brought about by the pandemic, it is crucial to monitor these spending trends and their implications. Governments and policymakers can use this data to understand the evolving needs and priorities of their citizens and residents. Additionally, businesses in the travel and tourism industry can adapt their strategies to cater to the changing demands of travelers.
Source: TimesKuwait
