Jeddah, Asharq Al-Awsat—Total household spending in Saudi Arabia in the run-up to the Muslim holy month of Ramadan has reached its highest levels this year, Asharq Al-Awsat has learned.
A report due to be published within the next few weeks by the Kingdom’s central bank, the Saudi Arabian Monetary Agency (SAMA), will show that household spending in the Kingdom reached a record 724 billion rials (193 billion US dollars) during June and July this year.
Secretary-General of the Saudi Banking Information and Awareness Committee Tala’at Hafiz said the rise in spending this year was due to the compounded effect of Ramadan coinciding with the shopping season in Saudi Arabia, which falls in the summer months, and during the summer school break.
There is traditionally a surge in retail activity during Ramadan and in the months leading up to it in the Kingdom. In recent years this has also been accompanied by an increase in electronic transactions.
Another report already published by SAMA expects an increase in electronic payments during Ramadan this year of 10 percent compared to the same period last year, as well as a 24-percent increase in the use of Electronic Points of Sale (EPOS).
The report also showed that the number of transactions carried out through the Saudi Payments Network (SPAN)—the central system in the Kingdom which connects ATM payments and withdrawals, EPOS payments, and credit card payments—totaled 1.3 billion in 2013.
Hafiz cited intensified marketing campaigns by banks encouraging the use of electronic payments—as well as numerous incentives they have offered to customers—for the jump before and during Ramadan this year.
He also cited the country’s favorable demographics, with a relatively young population and high Internet and smartphone usage fueling the rise in non-cash payments.
Sixty percent of the Saudi population is under the age of 21, according to data from the Economist, and the Kingdom also has one of the highest number of Internet users—16 million—in the MENA region, in addition to 151 million smartphones currently in use in the country.
But the SAMA report also shows cash is still overwhelmingly popular in the Kingdom, and expects a 9-percent year-on-year jump in ATM withdrawals this Ramadan, with withdrawals from ATMs totaling 658 billion rials (175 billion dollars) throughout the whole of 2013.