MasterIndex of Retail Forecasts Slower Retail Sales Growth in Asia Pacific in First Half of 2006

Retail sales growth across most Asia Pacific markets is expected to weaken for the first half of 2006, according to the latest MasterIndex of Retail forecast released by MasterCard International earlier this week.

Ten out of the 12 Asia Pacific markets included in the report are predicted to see growth of retail sales slow down in the first half of 2006; only Hong Kong and Japan are forecast to improve in year-on-year growth at a modest 4.2% and 3% respectively.

China and the Philippines will take the lead with double-digit growth in retail sales, both at an anticipated 12% year-on-year for the first six months, followed by Malaysia (8.8%) and Singapore (7.5%). The remaining less bullish markets include Thailand (4%), Indonesia (3.9%), New Zealand (3.6%), Taiwan (2.9%), Australia (2.5%) and Korea (2.3%).

“The forecast result of a slowdown in retail sales growth in Asia is not surprising given the steadily rising interest rates, higher world price of oil, and continuing uncertainty due to the bird flu and persistent terrorism threats,” observed Dr. Yuwa Hedrick-Wong, economic advisor to MasterCard in Asia Pacific. He pointed out further that “the interest rate cycle will likely peak by mid-2006 and we should see a stronger showing in retail sales by the end of this year.”

Conducted twice a year in June and December, the MasterIndex of Retail was launched in June 2003 by MasterCard as part of its knowledge leadership initiatives in Asia Pacific. It provides six-month forecasts of retail sales growth in 12 markets: Australia, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan and Thailand.

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