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Asia Pacific commercial spending reaches US$15 trillion in 2005, forecast to exceed US$16 trillion in 2006

Travel News Asia 1 March 2006

Visa Asia Pacific today released its global Commercial Consumption Expenditure (CCE) forecast for 2006, which projects that the regions business and government spending will exceed US$16.1 trillion this year.

The CCE index provides the global payment industry, including Visa and its 21,000-member banks, with an unbiased and consistent method of monitoring and tracking global business and government expenditure. The global CCE index includes all commercial and government purchases of goods and services with the exception of payroll.

Asia Pacific is projected to be the third-largest spending region among the CCE indexs six regions, behind the US projected total of $17.4 trillion, and Europes predicted 2006 commercial spending level of $22.1 trillion.

Michael Cannon, General Manager, Commercial Solutions, Visa Asia Pacific said, These figures further underpin the phenomenal speed at which the Asia Pacific economy is growing. In just a year, Asia Pacific has moved from the fifth-ranked region in terms of percentage expenditure growth worldwide to the second highest, mainly fuelled by growth in China. We expect this percentage growth rate to continue, bringing the regions total CCE closer to that of Europe.

Within Asia Pacific, Japan continued to report the biggest CCE spend ($5.4 trillion) followed by China ($3.6 trillion) and India ($1.9 trillion). China represented the highest rate of year-on-year growth at 16 percent, with India reporting 13 percent.

CCE Methodology

Utilizing methodology developed by Visa and launched in 2004, CCE draws upon government data in methods similar to the personal consumption expenditure index, which monitors consumer-related spending. Global CCE is estimated using four key data elements: the amount of business-to-business purchases of goods and services used in production; wholesale and retail purchases of final goods; some business capital expenditures; and government spending on goods and services. Adjustments were made for capitalized expenditures, such as construction and durable defence spending. The calculations measure transactions at basic prices, which include taxes (less subsidies) on production. The types of transactions included in CCE can be captured on a variety of Visa products including Visa Corporate, Visa Commerce, Visa Purchasing,  Visa Business and Visa Distribution cards.

Visa Commercial Cards in the Asia Pacific region have become increasingly popular. In the government sector, Thailand is the latest country to mandate card usage and according to Deputy Finance Minister, Varathep Ratanakorn, all state agencies nationwide are now required to use credit cards to manage expense accounts to help improve cash  control.

See other recent news regarding: Visa, Credit Cards

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