Saudis struggle to save money, says survey



JEDDAH : DIANA AL-JASSEM

Published — Tuesday 23 April 2013

Last update 26 April 2013 10:02 am

| نسخة PDF Print News | A A

Sixty percent of Saudis save less than 10 percent of their monthly salary, according to a survey conducted by souqalmal.com.
Saudis have been struggling to manage their financial resources within the higher inflation rate in the Kingdom and limited wages for middle-class people.
A recent report issued by Jadwa Investment confirmed that the Saudi consumer price index (CPI) inflation maintained the 3.9 percent year-on-year increase for the third consecutive month in March. It slightly increased to 0.3 percent on a monthly basis. According to the report, the main contributors to inflation are food and housing rent components.
Financial experts have said Saudi families lack awareness on consumer consumption and financial management.
“The reality is that many Saudis are using all their income to support themselves and their families and find saving difficult; the Saudi saving culture is weak.”
The Saudi knack for ostentatiousness makes them struggle to survive. Many reports confirm that Saudis are one of the highest spenders in the MENA region,” said Essam Khalifa, a member of the Saudi Economic Association.
According to a statement issued by the Conservation Delivery Streamlining Initiative (CDSI), all but two sub-components of food inflation have increased in the last month compared to a year ago, namely sugar and other food products.
Khalifa confirmed that Saudi Arabia is importing inflation since most of its imports are consumer-driven.
“The inflation rate is increasing annually, while the purchase power of the Saudi Riyal recently decreased by 50 percent. In addition, Saudis are killing their budget by paying off loans that cut 25 percent of their salaries. There is no doubt that banks are competing to offer attractive loans. Unfortunately, most Saudis are unaware of the danger of loans. These loans are given for goods that are not necessities, such as luxury cars, traveling to Europe and buying jewelry,” he said.
Majed Muftah, a real estate developer in Jeddah, stated that most Saudis are now demanding low rent and are still unable to pay on time.
“Due to inflation and unfixed minimum wages that most middle-class families are receiving in the Kingdom, Saudis demand low-rent apartments. I receive many Saudis who ask to pay the rent divided in three installments. They refuse to pay two installments where they cannot manage their financial resources. When I compare expats ability to rent with Saudi ability, I found that despite inflation, expats succeed in paying rents on time. I believe that expats are more aware of how to save money,” he said.
He added, “Most Saudi families also feel financial stress with 10 percent of those who pay the two installments on time.”
A report issued by Jadwa Investments have assured that rent inflation is expected to increase, where rent and the housing-related service price index increased by 3.1 percent in March versus 2.6 percent in February.
Jadwa Investment considered this increase the highest increase in housing inflation since June 2012, as the rent component accelerated to 3.7 percent year-on-year compared with 2.9 percent in the previous month. Housing inflation is expected to remain elevated, as the most recent government housing initiatives are likely to only ease housing market pressure in the long-term.
Arab News spoke to a Saudi bank officer who receives a monthly salary of SR 10,000, where he confirmed that families that receive SR 10,000 or less wouldn’t be able to save any of their salary at the end of the month. “I got a monthly salary that is to be considered fair enough, but I couldn’t manage my family expenses. I am suffering many factors like inflation and consumer needs prices, in addition to high rents and high school fees,” said Jamal Abdullelah.

What's happening around Saudi Arabia

UN Secretary General Ban Ki-moon and Saudi Arabia’s permanent representative to the UN Abdullah Al- Muallami unveiled a beautifully framed old kiswa (covering) of the door of the Holy Kaaba at one of the newly refurbished halls of the world body. The...
A policeman was shot dead by an unknown gunman in Qatif in the Eastern Province on Tuesday night.According to a spokesman of the Eastern Province police, the firing took place at 11:30 p.m. in a suburb called Al-Jishi.The targeted police officer was...
JEDDAH: Jeddah Show, one of the many events of Jeddah Summer Festival 36, is attracting a large number of visitors. The sound-and-light show is being run at the Jeddah International Exhibition and Convention Center.The show tells the story of the Bri...
JEDDAH: The Riyadh Traffic Department carried out extensive campaigns on the main streets, intersections and squares in the city to boost traffic safety levels and discourage bad driving.During the first 72 hours of the campaign, traffic personnel re...
RIYADH: One of two women infected with the Middle East Respiratory Syndrome coronavirus (MERS-CoV) died here in Riyadh, while the other patient is being treated at a hospital in Al-Kharj, some 60 km from the capital. Since June 2012, the Ministry of...
AL-AHSA: Approximately 20,000 tons of Al-Ahsa dates are planned to be marketed abroad during the new dates season.Muhammad Ismail, director general of the King Abdullah City for Dates (KACD), said: “The authorities in the city are planning to increas...
JEDDAH: Al-Bagdadiya neighborhood residents in Jeddah are living in a state of worry because of 20 abandoned houses, which serve as hideouts for criminals.Residents said some houses are on the verge of collapse and have turned into shelters for crimi...
JEDDAH: A committee consisting of representatives from the Hail governorate, municipality, health department and the Saudi Food and Drugs Administration (SFDA) has ordered the closure of a restaurant in the city’s industrial area.Twelve people suffer...
The board of the Saudia Standards, Metrology and Quality Organization has announced that mandatory application of the regulations on new tires produced or sold in the Kingdom will commence in November this year.The board explained that the technical...
JEDDAH: The number of people with mental health issues or depression is increasing in Saudi Arabia due to urbanization, marital or relationship problems, and not being able to keep up with rapid progress. A Saudi mother said that her daughter suffers...
JUBAIL: Jubail beaches are expected to receive many tourists during September as a large number of people usually head to the city once the summer gets cooler to enjoy their holiday here.As part of the beach preparations for this season, the Social S...
RIYADH: More than 50 percent of vehicle users in the Kingdom are not satisfied with the after-sales service of auto agencies in the Kingdom.In a survey conducted by the Ministry of Commerce and Industry (MCI) to evaluate the performance of automobile...
JEDDAH: The Appeals Court has upheld the verdict issued by a specialized penal court which sentenced Dr. Said bin Zair to four years in prison from the date of his arrest in 1428.According to the ruling, the academician is also banned from traveling...
JEDDAH: Health authorities in the Eastern Province are expected to issue a decision soon against four Saudi nurses accused of “negligence” for an incident which led to the amputation of the hand of a Saudi girl after they tried to insert a needle in...
JEDDAH: The Jeddah municipality has closed down a popular restaurant following the discovery of a rat rummaging through food items.The rat act was captured on video and posted on social media websites. It went viral, prompting the authorities to laun...

Stay Connected

Facebook