Mastercard: Expectation of economic growth fuels youth optimism in Asia Pacific

Consumer confidence in Asia Pacific bubbles with youthful optimism while The Philippines is the most optimistic market in the region, according to findings from the Mastercard Index of Consumer Confidence (H2 2017).

The Index is calculated on a scale of 0 to 100, with zero as the most pessimistic, 100 as the most optimistic, and a score of 40 - 60 as neutral. Between October and November 2017, 9141 respondents, aged 18 to 64 across eighteen Asia Pacific markets, were asked to give a six-month outlook on five economic factors: the Economy, Employment prospects, Regular Income prospects, Stock Market and Quality of Life.

The Index indicates that the region’s millennials (aged 18 – 29 years) are very confident about the next six months (72.9 points), while the older generation (aged 30 and above) are tempered in their outlook towards the future (66.7 points).

Rising economic growth, a soaring travel industry and greater intra-regional economic cooperation in Asia Pacific are fueling the region’s overall confidence at 68.5 points.

Since the latter half of 2016, optimism across both age groups has risen; consumers aged above 30 tracked a 6.3 point jump in optimism, while people aged below 30 tracked a 5.0 point lift.

These lifts are reflected across buoyant consumer sentiment towards the stock market, employment and economic performance. In particular, stock market optimism tracked a +10.2 point growth amongst people aged under 30 years.

Emerging economies most optimistic

Regardless of age group, the Index found that emerging economies such as The Philippines (94.5 points), China (92.2 points), Cambodia (92.2 points) and Myanmar (91.7 points) recorded the highest levels of optimism.

This is in sharp contrast to more developed markets like Taiwan (44.2 points) Malaysia (45.9 points) and Japan (51.0 points), where both age groups were more pessimistic. High levels of optimism in emerging markets can be attributed to infrastructure investments which are seen to drive more opportunities for jobs and upward social mobility.

Highlights

  • Sri Lanka (39.5 points) is the least optimistic market
  • Buoyed by growth in retail spending and inbound tourism over the last six months, Hong Kong’s under 30 population (+21.8 points) tracked the largest improvement in consumer confidence.
  • Geopolitical tensions in South Korea contributed to its significant deterioration in consumer confidence in both its under 30 (-28.3 points) and above 30 demographics (-18.4 points). South Korea experienced the greatest decline on the Index, dropping two ranks from very optimistic to neutral territory. The only other market to track declines across both demographics is Bangladesh (-8.1 points, -9.5 points).
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