A recently released survey from MasterCard International indicates that consumer confidence in the state of Asian regional economies for the first of half of 2005 is relatively strong. The 13 markets surveyed projected an average of 63.2% consumer confidence. The score was slightly lower than the scores of 68.4% and 65.8% for the first and second half of 2004, but it nevertheless exceeded the survey's historical average of 59.6%. 

 

The survey gauges consumer optimism twice a year on a scale of zero to 100. A reading above 50 is considered optimistic. Scores are determined by how consumers respond to questions regarding employment, the economy, regular income, the stock market, and quality of life. The study surveyed 5,517 urban middle class consumers from 13 Asia-Pacific markets between October 20 and November 5 of 2004. Nine out of 13 markets reported an optimistic outlook for the first half of 2005, up from 11 markets during the same period in 2004. 

 

China posted a score of 81.3% for the first half of 2005, as concerns arising from the government's attempt to slow down an overheating economy have eased. China's score represents a slight year-on-year drop from 83.7%, but a rise from the second half of 2004 when it scored 78.9%. Hong Kong regained its strength after an economic dry spell, precipitated by the SARS outbreak among other things. Hong Kong posted a score of 79.2% consumer confidence. Taiwan's score dropped year-on-year from 65.7% to 48.2%, suggesting the political climate may have caused consumer sentiment to sour. 

 

The weakest markets were found in South Korea, Japan, and the Philippines. Korean consumer sentiment has been weak throughout the period from 2003-2004. For the present outlook, Korea scored 29.6% consumer confidence. This is a significant drop from 43.6% last year, caused mostly by a gloomy employment outlook, high oil prices, and a rising tide of consumer debt. In Japan, consumer confidence in the economic recovery has faltered as the country's score fell from 47.6% in the second half of 2004 to 37.7% for the first half of 2005. However, the score still represents the second highest score for Japan in the 13-year history of the survey; Japan's historical average is 23.8%. Consumer confidence in the Philippines registered 33.7% for the first half of 2005.

 

Other Southeast Asian markets such as Thailand, Indonesia, Malaysia, Singapore, and Vietnam all boasted optimistic scores. In fact, consumer confidence in Indonesia was the highest in Asia, jumping from 49% in the first half of 2004 to 94.7% for the first half of 2005. MasterCard predicts that Indonesia's GDP will expand by 5.5% this year. It sees no significant impact from the tsunami disaster since it struck a province that only contributes two percent to Indonesia's GDP. 

 

MasterCard also believes that Thailand will recover quickly from the disaster, forecasting 5.2% GDP growth for the nation in 2005. Consumer confidence in Thailand fell from 69.2% to 59.4%, owing to high oil costs and separatist violence around the southern border with Malaysia. Consumers in Vietnam expressed high confidence for the third consecutive time with a score of 90.8% for the first half of 2005.