Nearly two years after the global recession sent shockwaves around Asian markets, consumers in Asia appear to have put recessionary fears firmly behind them and are anticipating a period sustained economic growth. MasterCard’s Worldwide Index of Consumer Confidence has for the second time in six months recorded an overwhelming sense of optimism across Asia, highlighting positive attitudes towards increasing quality of life, spending and incomes.

Asked to rate their confidence in certain areas of their countries’ economy from zero to 100 (zero as the most pessimistic, 100 as most optimistic and 50 as neutral), the majority of consumers gave an optimistic view overall, with respondents in Vietnam (93.7) and Singapore (86.6) reflecting the highest consumer confidence.

“If you look at back in 2009 when the global financial crisis was full blown, Asia was relatively sheltered. Unemployment did not shoot up, so the impact on employment and income was relatively minor. That formed the base for a return to positive sentiment,” says Dr Yuwa Hedrick-Wong, Economic Advisor, Asia/Pacific, MasterCard Worldwide.

Consumer confidence around Asia has been propelled by what Dr Yuwa Hedrick-Wong calls a “China-centric recovery.” Chinese consumers’ view of their economy, which for the history of the MasterCard index has never been in pessimistic territory, leapt significantly from one year ago (from 60.8 to 83.0) and remained higher than the Asia/Pacific region average (69.1).

Japan, however, remained the only nation where consumers retained a pessimistic view of their economy, scoring 27.8 points on the index, which was significantly lower than any other country, but showing a slight improvement from six months ago (24.4). In Hong Kong, consumers gave a 76.6 rating to their economy, higher the Asian average and showing a much more optimistic stance than six months ago (60.0) and a year ago (24.7).

Approximately 90% of Hong Kong citizens expect to save the same or more in the next six months primarily for investments, retirement, travel, home and purchasing consumer electronics. “For all intents and purposes Hong Kong is no longer a stand alone market. From the point of the real economy it is joined at the hip with China, but from the point of view of monetary policy it is tied to the US because of the currency pact. Going forward Hong Kong consumers will be affected by both,” said Dr Yuwa Hedrick-Wong.

Hong Kong citizens below the age of 30, along with singles and high income earners, also intend to increase their spending at a greater rate than most other Asia Pacific consumers, with the top purchasing priorities being dining/entertainment, travel and consumer electronics.

In fact, young consumers are driving optimistic sentiment throughout Asia, with consumers under the age of 30 giving an average rating of 73.0 points, as compared to 67.4 points average for those over the age of 30. Hong Kong showed a significant gap between the attitudes of the young and the old (83.3 for those below 30 versus 74.4 for those above 30), as did Singapore (92.0 versus 84.0) and New Zealand (77.2 versus 61.8).

“Whenever you have a recessionary hit on the economy, it is often the younger segment of the workforce that is affected first,” said Dr Yuwa Hedrick-Wong. “Now we see a situation where consumer sentiment is actually stronger amongst the younger workers and that tells you that job creation has moved to a higher gear and this is a very good indicator going forward.”

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