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MasterCard Consumer Saving Survey Covering Asia, Middle East and Africa

Travel News Asia Latest Travel News Podcasts Monday, 3 August 2009

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Consumers in the Asia Pacific, Middle East and Africa regions – especially those who are younger - are saving up for a rainy day.

According to the latest survey from MasterCard, the proportion of younger consumers below the age of 30 who are saving more in the days ahead is higher than that of older consumers.

77% of consumers below 30 plan to save either the same or more in the next six months, compared to those between 31 – 45 years (73%), 46 -55 years (72%) and those aged 56 years and above (71%).

In 8 of the 21 markets surveyed across the region, a majority of consumers are looking to save more in the coming six months. Topping the list of savers is Vietnam, with 52% of consumers intending to save more over the next six months. This is followed by India (47%), United Arab Emirates (47%), South Africa (47%), New Zealand (46%), Philippines (45%), Qatar (44%) and Australia (43%).

At the other end of the spectrum, Egypt has the highest percentage of consumers planning to save less at 63%. In Egypt and Taiwan (39%), the majority of the consumers are looking to save less. The majority of consumers in the rest of the markets intend to maintain their level of savings.

Uncertainty over the economy and hence the need to be prepared for unforeseen emergency expenditures (71%) is the top reason cited by consumers who are planning to maintain or increase their level of saving in the next six months. Thailand (95%) had the highest proportion of consumers concerned about the economic uncertainty, compared to China (48%) with the lowest proportion among markets in the region.

“Saving levels are a leading indicator of consumers’ future spending patterns. A lot of households save so that they can spend later on the purchase of large ticket items. From this perspective, such savings are merely indicators of future consumption. Precautionary savings are, however, qualitatively different. They represent a net subtraction of total spending because funds are put aside and untouched when people worry about the future. Therefore, precautionary savings affect consumer spending in ways that other forms of savings don't,” said Dr. Yuwa Hedrick Wong, economic advisor, Asia Pacific, MasterCard Worldwide.

“Our latest survey shows that the percentage of households saving for precautionary reasons has gone up. While the increase is slight, we are still seeing an uptrend and this has implications in terms of consumption in the region.”

Apart from having an emergency stash, the other main reasons for saving are for investing (46%), retirement (45%), and buying property (40%).

The main reasons for consumers saving less are because that they feel they do not earn enough to save (61%), high inflation (34%) and simply because they believe in enjoying life now (29%).

Egyptian consumers feel the strongest about not earning enough to save (82%), followed by Thai consumers (81%) and South African consumers (81%).

The majority of the region’s consumers save between 1 – 10% of their income (27%), followed by 11 – 20% of their income (22%). 9% of the region’s consumers do not intend to save any of their income.

As the Market Highlights from Asia Pacific and the Market Highlights from the Middle East and South Africa are so detailed we have devoted a whole page to each.

The MasterCard survey is based on a survey of 9,211 consumers in 21 markets, conducted between 23 March and 18 April 2009. Markets surveyed include Australia, China, Egypt, Hong Kong, India, Indonesia, Japan, Kuwait, Lebanon, Malaysia, New Zealand, Philippines, Qatar, Saudi Arabia, Singapore, South Africa, South Korea, Taiwan, Thailand, United Arab Emirates and Vietnam.

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