Myanmar, India and Indonesia top MasterCard Index; Consumer sentiment in Northeast Asian markets Taiwan, Japan and Hong Kong fall sharply 

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Singapore, 15 January 2015– Consumers in Asia Pacific’s emerging markets remain optimistic despite a slight decline in overall consumer confidence for the region, according to the MasterCard Index™ of Consumer Confidence, released today. This decrease comes after the region recorded the highest consumer confidence score in more than 10 years in the previous survey (H1 2014).

Respondents were asked to give a six-month outlook on five economic factors including the economy, employment prospects, regular income prospects, and their quality of life. The Index is calculated with zero as the most pessimistic, 100 as most optimistic and 50 as neutral. The Index and its accompanying reports do not represent MasterCard’s financial performance.

The Index is based on a survey conducted between October 2014 and November 2014 on 8,235 respondents aged 18 – 64 in 16 countries across Asia Pacific.    Consumers in Asia Pacific’s emerging markets remain optimistic despite a slight decline in overall consumer confidence for the region, according to the MasterCard Index™ of Consumer Confidence, released today. This decrease comes after the region recorded the highest consumer confidence score in more than 10 years in the previous survey (H1 2014).

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Key Takeaways (Overall)

The Asia Pacific markets are optimistic overall despite a decrease of 2.9 Index points to 65.5 Index points in H2 2014, from 68.3 Index points in H1 2014.

Compared to H1 2014, only the Philippines (up 7.7 Index points) and Bangladesh (up 16.9 Index points) out of the 16 Asia Pacific markets surveyed recorded a greater than 5 Index point improvement in consumer confidence. 10 out of 16 Asia Pacific markets remained stable with either muted improvements or declines.

There were declines across all five key economic indicators for Asia Pacific: economy (62.7 Index points in H2 2014 from 67.1 Index points in H1 2014), employment (65.8 from 69.2 Index points), regular income prospect (75.5 from 77.5 Index points), stock market (61.5 from 65.7 Index points), and quality of life (61.9 from 62.2 Index points).

 

 

Key Takeaways (by Country) 

Bangladesh recorded the single largest improvement in Asia Pacific, moving from optimistic to very optimistic territory at 83.3 Index points, up 16.9 Index points. It is the only market that saw a double-digit rise in consumer sentiment.

Myanmar, India and Indonesia are the Asia Pacific region’s most optimistic markets, with 97.2 Index points, 91.6 Index points and 90.1 Index points, respectively.

Within Southeast Asia, consumer confidence rose in the Philippines by 7.7 Index points, pushing into optimistic territory (77.1 Index points), while Malaysia saw a deterioration in consumer confidence, down 11.5 Index points to 49.9 Index points in H2 2014, sliding below the 50 point neutral mark for the first time since the financial crisis low in H1 2009.

Vietnam (85.3 Index points) and Thailand (83.6 Index points) remain very optimistic and Singapore remains optimistic (60.9 Index points).

While consumer confidence in China (up 2.7 Index points to 85.3 Index points in H2 2014) and South Korea (up 1.7 Index points to 43.6 Index points) stayed stable with muted increases, their Northeast Asian counterparts posted the sharpest declines in consumer confidence, led by Taiwan (down 23.8 Index points to 33.8 Index points), Japan (down 17.6 Index points to 34.2 Index points) and Hong Kong (down 13.5 Index points to 40.9 Index points). All three markets plunged below the 50 point neutral mark from the previous survey.

Additional declines were recorded in Australia (down 3.2 Index points to 34.1 Index points in H2 2014) keeping it in pessimistic territory, while New Zealand inched closer to the 50 point neutral mark after falling 9.4 Index points to 56.4 Index points. Australia’s score is the lowest since the financial crisis low in H1 2009.

“The slight drop in Asia Pacific’s consumer confidence reflects an outlook of cautious optimism. Consumers across the region are holding their breath for signs of sustained economic growth and opportunity. Emerging markets Myanmar, India and Indonesia are the most optimistic because of either positive anticipation for a brighter future or excitement around their respective newly-minted governments. Conversely, the developed markets of Northeast Asia, namely Taiwan, Japan and Hong Kong were much less optimistic in their outlook. In these markets, the wanted signs of long-term growth and opportunity are blocked by Hong Kong’s recent political crisis and Japan’s weakening yen,” said Pierre Burret, Head of Delivery, Quality & Resource Management for Europe, Asia Pacific, Middle East & Africa, MasterCard Advisors.

The Index is based on a survey conducted between October 2014 and November 2014 on 8,235 respondents aged 18 – 64 in 16 countries across Asia Pacific. This is the 44th survey of Consumer Confidence conducted since 1993.

Methodology

Respondents were asked five questions pertaining to their six-month outlook on the economy, their employment prospects, the local stock market, their regular income prospects, and their quality of life. The results of their responses were converted in five component indexes which were subsequently averaged to form the MasterCard Index of Consumer Confidence (MICC) score. The MICC Index score and the 5 component index scores range from 0 – 100 where 0 represents maximum pessimism, 100 represents maximum optimism and 50 represents neutrality.

About the MasterCard Index™ of Consumer Confidence

The MasterCard Index™ of Consumer Confidence survey has a 20-year track record of consumer confidence indices collected from over 200,000 interviews, unequalled both in scope and history across Asia Pacific, Middle East and Africa.

The MasterCard Index of Consumer Confidence is the most comprehensive and longest running survey of its kind in the region.  In June 1997, the Index revealed a decline in consumer confidence – one month prior to the devaluation of the Thai baht that triggered the regional economic crisis. In June 2003, the Index score for Employment in Hong Kong dropped to a low score of 20.0. This was subsequently reflected in Hong Kong’s unemployment rate, which peaked just before September 2003 at eight percent.

The survey comprising the Asia Pacific markets began in the first half of 1993 and has been conducted twice yearly since. Markets from the Middle East and Africa were included in the Index from 2004. Twenty seven markets now participate in the survey: Australia, Bangladesh, China, Egypt, Hong Kong, India, Indonesia, Japan, Kenya, Kuwait, Lebanon, Malaysia, Morocco, Myanmar, New Zealand, Nigeria, Oman, Philippines, Qatar, Saudi Arabia, South Korea, South Africa, Singapore, Taiwan, Thailand, United Arab Emirates and Vietnam.

The Index is calculated based with zero as the most pessimistic, 100 as most optimistic and 50 as neutral.  Five economic factors are measured: Employment, the Economy, Regular Income, Stock Market and Quality of Life. The responses are consumers’ thoughts on the six months ahead. Data collection was via internet surveys and face to face interviews, with the questionnaire translated to the local language wherever appropriate and necessary.  The survey has a margin of sampling error of plus or minus four to five percentage points at the 95 percent confidence level.

MasterCard and its Suite of Research Properties

The MasterCard Index suite in Asia/Pacific, Middle East and Africa includes the long-running MasterCard Index of Consumer Confidence, as well as the MasterCard Index of Women’s Advancement, MasterCard Survey on Online Shopping, MasterCard Index of Financial Literacy, and the MasterCard Index of Global Destination Cities. In addition to the indices, MasterCard’s research properties also include a range of consumer surveys including Ethical Spending and a series on Consumer Purchasing Priorities (covering Travel, Dining & Entertainment, Education, Money Management, Luxury and General Shopping).

MasterCard also regularly releases Insights reports providing analysis of business dynamics, financial policies and regulatory activities in the Asia/Pacific, Middle East and Africa region. Over 80 Insights reports have been produced since 2004. MasterCard has also released a series of four books on Asian consumer insights, authored by Dr. Yuwa Hedrick-Wong, Global Economic Advisor for MasterCard and published by John Wiley & Sons.

About MasterCard

MasterCard (NYSE: MA), www.mastercard.com, is a technology company in the global payments industry. We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. MasterCard’s products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter @MasterCardAP and @MasterCardNews, join the discussion on the Beyond the Transaction Blog and subscribe for the latest news on the Engagement Bureau.

Contacts

Georgette Tan, MasterCard, georgette_tan@mastercard.com, +65 6390 5971
Samantha Yong, Weber Shandwick, samyong@webershandwick.com, +65 6825 8053