Over 40% of Consumers across Asia/Pacific, Middle East and Africa Planning to Save More in the Six Months Ahead, despite renewed optimism
While consumers across Asia/Pacific, Middle East and Africa are feeling more optimistic about the six months ahead, many are not letting up in terms of stocking up their coffers. According to the latest MasterCard survey on consumers’ saving priorities, over 40% of them are planning to save more in the coming six months compared to six months ago.
Nigeria (85%), the Philippines (67%), Indonesia (64%), Thailand (56%) and Qatar (52%), have the highest percentage of consumers reporting that they plan to save more in the coming six months. Kenya, on the other hand, has the highest percentage of respondents (42%) reporting that they plan to save less, followed closely by Lebanon (41%).
The survey was conducted from 1 October to 9 November 2009 and involved 10,623 consumers from across Asia/Pacific, Middle East and Africa. Three new African markets were added to this survey - Kenya, Morocco and Nigeria - bringing the total number of markets surveyed to 24[1]. Data collection was via personal, online, telephone and Computer Aided Telephone interviews, with the questionnaire translated to the local language wherever appropriate and necessary. The Index and its accompanying reports do not represent MasterCard financial performance.
Uncertainty over the economy and hence the need to be prepared for unforeseen emergency expenditures (74%) is the top reason cited by consumers who are planning to maintain or increase their level of saving in the next six months. The Philippines (91%) had the highest proportion of consumers concerned about the economic uncertainty, compared to Morocco (30%) with the lowest proportion among markets in the region.
Also Read
Apart from having enough for a rainy day, the other main reasons for saving are for investing (44%), buying or upgrading property (37%) and retirement (30%). The majority of the region’s consumers save between 1 – 10% of their income (28%), followed by 11 – 20% of their income (23%). Five percent of the region’s consumers do not intend to save any of their income.
Interestingly, it’s the younger set of consumers who are more enthusiastic about saving. Eighty-four percent of consumers below 30 plan to save either the same or more in the next six months, compared to those between 30 – 44 years (81%), 45 -54 years (78%) and those aged 55 years and above (76%).
“From an economic perspective, saving intentions can be categorized in two distinctively different ways. The first are saving intentions that lead to future consumption, typically for large expenditures such as purchase and/or upgrade of properties, autos, and for retirement. Savings made for these purposes are therefore leading indicators of future consumption. This type of savings has continued to be a key driver of savings behavior across the Asia/Pacific region,” said Dr. Yuwa Hedrick-Wong, economic advisor, Asia/Pacific, MasterCard Worldwide
“On the other hand, savings for precautionary purposes subtract absolutely from present and future consumption when consumers feel the need to save more of their current income because they worry about the future. While we have seen that consumers across this region have turned cautiously optimistic about the economy, they remain nevertheless concerned with the region's near term economic outlook. This is understandable given the recent market volatility and its associated uncertainty. Hence, precautionary savings are staying relatively high in the region, which in turn implies that some downward pressure on future consumption will likely persist,” Dr. Hedrick-Wong added.
The main reasons for consumers saving less are because that they feel they do not earn enough to save (55%), high inflation (34%) and low interest rates/low returns (15%). Japanese consumers feel the strongest about not earning enough to save (87%), followed by consumers in the Philippines (74%) and Moroccan consumers (72%).
India Highlights:
- A similar proportion of male consumers (31%) and female consumers (30%) surveyed in India are planning to save more in the next six months.
- Younger consumers between the ages of 18 to 29 years old (33%) and consumers between the ages of 30 to 44 years (33%) are planning to save more in the next six months compared to their older counterparts – 45 to 54 years (25%) and 55 years and above (22%).
- The economic uncertainty has caused 85% of Indian consumers to either maintain or increase their level of savings in preparation for unforeseen emergency expenditures. Among the different age groups, those in the 18-29 age bracket (87%) are most concerned about saving for a rainy day.
- Indian consumers are also saving for investments (54%), buying or upgrading property (38%) and consumer electronics (25%).
- An equal proportion of Indian consumers (39% each) plan to save between 1-10% and 11-20% of their income in the next six months.
