India’s Consumers Are Asia’s Most Optimistic, According to Mastercard

India once again tops the Mastercard Index of Consumer Confidence in Asia Pacific, with Myanmar, Vietnam, Philippines and Bangladesh rounding off the top five, according to the credit card company’s survey in the second half of 2016.

Overall, consumer confidence in Asia Pacific continues to hold steady, showing stability (within +/- 5 points from the last survey) in nine out of 17 markets.

And with an increase of 1.2 points in the overall score from the first half of 2016 to 60.9 points in the second half, Asia Pacific sits just above the 60 point optimistic mark.

Significant movements

However, the overall stability masks some significant movements across five markets in the region compared to the previous six months. Hong Kong, Thailand and Bangladesh saw an improvement in consumer confidence of more than 10 points, while Malaysia and Taiwan saw a decrease of more than 10 points.

Bangladesh recorded the largest gain of 11.2 points to 82.8 points – a significant improvement in overall consumer confidence compared to first half 2016, where it saw a relatively smaller increase of 4.2 points.

Bangladesh’s increase in score was backed by an improvement in all components, the largest coming from heightened expectations in stock market movements (+24.6 points). Both Thailand and Hong Kong also saw a large improvement of 10.1 points, putting Thailand in optimistic territory and Hong Kong in neutral territory.

On the other hand, eight of the 17 markets saw a deterioration in confidence levels compared to the first half of 2016. The biggest decline in optimism levels was observed in Taiwan, followed by Malaysia, and Myanmar. According to the survey, prospects for the stock market (property market in Myanmar, which does not have a stock market), was the key driver of the decline.

The Mastercard survey was conducted between November and December 2016 and involved 8,723 respondents, aged 18 to 64 in 17 Asia Pacific markets. Respondents were asked to give a six-month outlook on five economic factors including the economy, employment prospects, regular income prospects, the stock market and their quality of life.

The Index is calculated on a scale of 0 to 100, with zero as the most pessimistic, 100 as the most optimistic, and between 40 and 60 as neutral.

Country-level detail

  • India (95.3) remains in extremely optimistic territory, with a slight decline of 2.4 points overall, due to small decreases in all five components, while Thailand (68.3) halted its two- year slide, recording a 10.1 points improvement with increases across all five components and a more than 10 points gain in outlook on the Economy (+11.2), Employment (+11.1) and Quality of Life (+14.3).
  • Taiwan (34.2, -11.1) showed the largest deterioration in confidence levels of all 17 markets surveyed. While all five components saw declines, Stock Market (-18.3) and Quality of Life (-14.9) registered particularly large drops.
  • Malaysia saw a significant decline from six months ago, with a decrease of 10.2 points to 31.2, dropping to the second lowest ranked in the region. All five components declined, with outlook on Stock Market (-13.1) contributing the most to the drop.
  • Singapore saw a drop of 3.6 points to 30.0. Three of the components fell by more than 5 points: Regular Income (-6.5), Economy (-6.1), and Employment (-5.2).
  • Korea (31.2, -3.0) moves further into sub-50 territory, driven downwards by an 8.7 points decline in confidence in outlook of the local Stock Market (28.1), while the outlook in China (80.8, +4.8) continues to increase since H1 2016 due to improvement across all five components, with Stock Market (+9.1) contributing the most to the increase.
  • Australia (46.5) remains in neutral territory, recording an increase of 4.2 points with improvements across all five components, while New Zealand (62.2, +6.8) recorded an improvement from neutral to optimistic territory since the previous survey with a more than 10 points gain in outlook on the Economy (+12.7), Employment (+11.4) and Quality of Life (+10.3).
  • Vietnam (92.3, -2.5) and Myanmar (92.8, -7.0) remain in extremely optimistic territory, despite a decrease in overall confidence, both led by a significant decrease in the Stock Market component (Property Market for Myanmar which does not have a stock market).
  • Consumer confidence in Hong Kong (42.2), Japan (43.0) and Sri Lanka (40.1), all previously in the pessimistic territory, posted increases of 10.1 points, 5.0 points and 2.1 points respectively, which shifted all three markets from pessimistic to neutral territory.
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