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MasterCard Survey Forecasts Continued Retail Sales Growth across Asia Pacific in 1H 2008

Travel News Asia Latest Travel News Friday, 18 January  2008

Retail sales across Asia Pacific are expected to show continued growth on the back of a strong consumer confidence sentiment for the first half of 2008, according to the latest MasterCard Worldwide Index of Retail released by MasterCard Worldwide.

While the forecast is for positive expansion across all the 12 Asia Pacific markets, China maintains its lead with retail sales anticipated to reach 4743 billion yuan, representing a 12.8% year on year growth. Other markets with strong growth include Indonesia (12.6% vs. 4.6% in 1H2007) and Hong Kong (10.5% vs. 3.2% in 1H2007), both observing a significant increase in the year on year growth rate of 8% and 7.3% respectively when compared to the same period last year.

The global economic turmoil will inevitably affect Asia in 2008, however. The real test is to what extent Asian economies will be able to continue to drive growth with domestic demand; and thereby maintaining a steady pace of healthy retail sales, observed Dr. Yuwa Hedrick Wong, economic advisor, MasterCard Worldwide.

Markets remaining less bullish include Taiwan, New Zealand and Japan, with a year on year growth expected to reach 2.9%, 2.4% and 0.7% respectively.

Taiwans weak retail sales expectation is a reflection of poor consumer sentiments, with uncertainty being made worse as a result of the coming elections. Japan is experiencing a cyclical downturn, which has clearly affected consumer spending. And, in New Zealand while the momentum of economic growth is slowing rapidly, interest rates are rising, which in turn are affecting retail sales, Dr. Hedrick-Wong added.

The MasterCard Worldwide Index of Retails forecast for the first half of 2008
Retail Sales Forecast Year on Year Growth
Australia* A$100.2 billion 4.50%
China*** 4743 billion yuan 12.80%
Hong Kong* HK$126.7 billion 10.50%
Indonesia*** 243.6 trillion rupiah 12.60%
Japan* 59.2 trillion yen 0.70%
Korea* 77.6 trillion won  8.20%
Malaysia*** 40.5 billion ringgit 6.70%
(*excludes hospitality, catering and auto sales)
(**excludes hospitality and catering, includes auto sales)
(*** includes wholesale, hospitality, catering, auto sales)

Conducted twice a year in June and December, the MasterCard Worldwide Index of Retail was launched in June 2003 by MasterCard as part of the company's knowledge leadership initiatives in Asia Pacific. Combining 10 years of retail sales data, factoring in the secular trend of growth of the retail industry, and using the MasterCard Worldwide Index of Consumer Confidence as an independent variable, the Index 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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