Asian consumer confidence stable

Asian consumer confidence is holding steady in nine of the 17 markets, according to the latest MasterCard Index of Consumer Confidence.

With a negligible 0.05-point increase in the overall score, Asia Pacific continues to sit just below the 60-point “optimistic” mark at neutral.

Taiwan’s gain of 16.3 to 45.3 points was the largest – a leap from among the lowest 17 markets in last year’s second-half survey, where it deteriorated more than 20 points. Taiwan’s reverse was backed by an improvement in all components, the largest coming from heightened expectations in stock-market movements.

After its elections in May, the Philippines improved 12.9 points to place it in “extremely optimistic” territory at 95.2 points, its highest level since the country became involved in the survey in 1995.

On the other hand, seven markets had their confidence levels fall compared to the second half of last year. This was most noticeable in Indonesia, followed by Hong Kong then Singapore.According to the survey, employment prospects were the key reason for the decline.

Over June and July, 8746 respondents between 18 and 64 years in 17 Asia Pacific markets were asked to give a six-month outlook on five economic factors – the economy, employment prospects, regular income prospects, the stock market and their quality of life. The Mastercard index is calculated on a scale of 0 to 100, with zero as the most pessimistic, 100 the most optimistic and 50 as neutral.

Driving growth

“The region’s emerging markets, including China, India, Vietnam, Myanmar and the Philippines, remain resilient with consumers expressing optimism about economic prospects over the next six months,” says Mastercard Advisors Asia-Pacific senior VP Eric Schneider. “Even as emerging Asia continues to drive the region’s growth, governments and businesses need to ensure stability and strong fundamentals in order to weather future external shocks.”

A key finding of the report is overall consumer confidence being stable, edging up 0.05 points to 59.72 from 59.67 in the second half of last year.

As well as Taiwan’s large improvement, India, Malaysia and the Philippines also had improvements of at least five points.

The developing markets of India (97.6), Myanmar (99.8), Philippines (95.2) and Vietnam (94.9) remain “extremely optimistic” in their outlook.

Declines were recorded in seven markets, significantly in Indonesia (-14.7), Hong Kong (-12.4) and Singapore (-10.7). The decreases in Hong Kong, Japan (-8.8) and Singapore moved these markets from neutral into pessimistic territory.

Country level

At a country level…

·         India (97.6) solidified its position in extremely optimistic territory, posting a 7.5 points gain, while Malaysia (41.4) halted its two-year slide with a 9.5-point improvement through increases across all five components and a more than 10-point gain in outlook on the stock market (up 12.4) and quality of life (11.4).

·         Indonesia (down 14.7 to 61.8) had the largest drop in confidence levels of the 17 markets surveyed. While all five components declined, employment (-26.9) and the economy (-22.5) were particularly weak.

·         Hong Kong, in a significant deterioration from six months ago, fell 12.4 points to 32.1 and now has the lowest score in the region. All five components declined, with employment (-20.9) contributing most to the drop.

·         Singapore dropped 10.7 to 33.6. Three components fell by more than 10 points: quality of life (-14.5), regular income (-12) and employment (-11).

·         Japan (down 8.8 to 38) moved further into sub-50 territory, driven downward by a 22-point decline in confidence in the stock market (35.9). Thailand continued its two-year slide with confidence in the economy (-11.3) showing the biggest drop.

·         While Australia and New Zealand stay in neutral territory, Australia had a slight 0.1 drop while New Zealand had an upward swing of 3.4 points thanks to improved outlook on employment and the stock market.

·         Vietnam (up 0.7 to 94.9) and Myanmar (up 4 to 99.8) remain in extremely optimistic territory. Their increase in overall confidence was led by significant improvement in the stock market for Vietnam and the property market for Myanmar, which does not have a stock market.

·         Consumer confidence in China (76) and Bangladesh (71.6), both previously in optimistic territory, increased 1.4 and 4.3 points respectively, which shifted China from optimistic to very optimistic.

·         Sri Lanka (38) dipped 4.2 points into pessimistic territory, while South Korea (34.2), despite an 0.4-point increase, stayed in pessimistic territory.

With a 20-year track record, the Mastercard Index of Consumer Confidence survey collects data from more than 200,000 interviews across Asia Pacific.

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