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Saudi consumer confidence second highest in world

Consumer confidence surged in Saudi Arabia and other Middle East and North African states in the first quarter, but deteriorated in the euro zone periphery as Portugal’s financial woes came to a head, a survey released Sunday showed.

Saudi Arabia, second behind India in the quarterly global survey, and the UAE also saw double-digit growth in their scores from the previous quarter’s survey, Reuters reported. Saudi Arabia’s score jumped 11 points from the fourth-quarter of 2010 to 118 in the global poll of consumer confidence by The Nielsen Company, a market information and analysis concern.

Confidence remained the highest in India, maintaining its fourth-quarter score of 131. India’s score was below the country’s record 137 index reading in the second half of 2006, the highest reading for any country in the Nielsen consumer confidence index’s history.

John Sfakianakis, chief economist at Banque Saudi Fransi, said consumer confidence went up in Saudi Arabia due to optimism stemming from the government’s raft of social assistance programs dominated by the announcement it would invest in the construction 500,000 housing units. The programs also include financial injection into the Real Estate Development Fund and, for public employees, a two-month salary bonus, a 15 percent raise to cover rising living costs, a minimum wage and unemployment checks starting later this year. The public sector is the Kingdom’s largest employer of Saudis. Some companies followed suit and distributed bonuses to their employees, especially Saudi ones.

“Naturally, as public and private sector employees benefited from one-off bonuses in March coupled with government handouts, the overall confidence rate rose,” said Sfakianakis.

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