Consumer spending in the Asia Pacific region is expected to see a turnaround this year, with double-digit growth in retail sales likely in various countries, including India, says a survey.
As per the MasterCard Worldwide Index of Consumer Spending Capability (MWICSC), people are expected to be in a stronger spending position this year, riding on the improving economic conditions.
"A robust turnaround in consumer spending is expected in 2010 across the Asia-Pacific, with double-digit retail sales growth predicted in China, Hong Kong, India, Indonesia, South Korea, Malaysia and Singapore as a result of the improving fundamentals," the report stated.
The index builds on understanding gained from MasterCard Worldwide's consumer confidence gauge, combining it with six key factors --household income, household indebtedness, interest rates, equity markets, property prices and consumer price inflation.
The strengthening MWICSC scores suggest retail sales would grow in Hong Kong (which added 12.5 points), Korea (11.9), Taiwan (15.5), China (1.9) and Japan (1.2) in 2010.
"India's MWICSC shows a robust increase of 9.9 points in 2010, signaling possible double-digit growth for the year," the report noted.
The surveyed covered various markets in the Asia-Pacific region, including Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, South Korea, Singapore, Taiwan, Thailand, and Vietnam.
The report also revealed that 52 per cent of consumers in the Asia-Pacific region plan to maintain their discretionary spending at the same level as it was six months ago, while 18 per cent plan to increase it.
Consumers in China (26 per cent), India and South Korea (both 24 per cent each) are the most likely to increase their discretionary spending in the six months ahead, it said, adding consumers in the Philippines (65 per cent), Indonesia (49 per cent) and Thailand (47 per cent) are prone to reduce their discretionary spending.
"In markets like Indonesia, Hong Kong, Singapore, India and Malaysia, the rise in spending capability this year is expected to be particularly strong. The timing of this rise in MWICSC is important as governments everywhere are exiting their aggressive fiscal spending programmes introduced last year," MasterCard Worldwide economic advisor (Asia/Pacific) Yuwa Hedrick-Wong said.
