AsPac consumer confidence rises on stable economic growth – survey

MANILA, Philippines - Consumer confidence across Asia Pacific has risen amid stable economic growth, with the emerging markets of Myanmar, India, Indonesia and the Philippines leading the region, according to the latest MasterCard index of consumer confidence.

The MasterCard Index of consumer confidence is based on a survey conducted between April 2013 and May 2013 on 12,205 respondents aged 18 – 64 in 27 countries within Asia Pacific, Middle East and Africa. This is the 41st survey of Consumer Confidence conducted since 1993.

Now in its 20th year the index is Asia Pacific’s most comprehensive and longest running consumer confidence survey. Respondents were asked five questions pertaining to their six month outlook on the economy, employment prospects, the local stock market, their regular income prospects and their quality of life. The Index score is calculated with zero as the most pessimistic, 100 as most optimistic and 50 as neutral.

Overall, 10 out of 16 Asia Pacific markets recorded positive improvements from the second half of 2012, led by Myanmar (96 index points), India (82 index points), Indonesia (81.0 index points) and the Philippines (79.9 index points). Japan recorded the most substantial improvement in consumer confidence, surging 37 index points from the previous survey to 60.7 index points, the highest it has been since the second half of 2005 when the index reached 63.0 index points1.

Sentiment among Taiwanese and Korean consumers also jumped, with increases of 19.2 index points and 14.8 index points respectively. The overall score for Taiwan more than doubled that seen in the previous Index (25.7 index points).

“Overall, Asians are still relatively optimistic about the state of their economies. The large jumps in consumer confidence seen in Japan can be attributed to the government’s measures to tackle deflation, whereas in the case of Korea it can be linked to the new government’s strong measures to boost the domestic economy, particularly in property-related tax cuts,” said Pierre Burret, Region Head, Asia/Pacific, MasterCard Advisors.

The biggest deterioration in consumer confidence was seen in Bangladesh, which dropped 39.5 index points to 22.2 index points, underpinned by political uncertainty, a series of strikes, and crisis in the key garments sector. Consumer confidence also declined in Vietnam, down 16.1 index points from the previous survey to 58.4 index points, with the sub-indexes for all major indicators taking a hit.

Overall, sentiment among consumers in Asia Pacific improved by 1.2 index points, from 62.1 index points in the second half of 2012 to 63.3 index points. Across the region, the indicator of employment showed the largest increase of 3.2 index points (from 59.4 to 62.6 index points), followed by stock market (+2.3 index points; from 59.0 to 61.3 index points), economy (+1.6 index points; from 60.0 to 61.6 index points), and regular income (+0.4 index points; from 73.8 to 74.2 index points). Quality of life, however, declined by 1.5 index points (from 58.1 to 56.6 index points).