Resilient optimism in Asian markets: Despite rising cost of living concerns, Asia remains positive about global, APAC and local economies
A new economic and spending sentiments report has revealed a prevailing sense of optimism across Asian markets, despite mounting concerns over the rising cost of living.
Findings from the report indicate a widespread positive outlook towards the economy in Asia. Notably, Indonesia emerges as a frontrunner, with over 60% of respondents expressing confidence in an improved global economy. Similarly, Vietnam demonstrates strong optimism, with more than 50% of participants sharing positive sentiments. While Malaysia and Singapore exhibit a more reserved stance, over two-fifths of participants still hold optimistic views regarding the global economy. Conversely, the outlook in Hong Kong appears more cautious, with only 20% of respondents expressing optimism. This reflects the region's gradual economic recovery and the influence of both cyclical and structural factors.
Asian populations attribute their optimism to various factors such as robust economic growth, infrastructure development, national security, innovation and technology, and the stability of the financial system. However, the report emphasises the importance of considering the potential impact of inflation and political sentiment on economic growth and stability. Notably, over 60% of consumers surveyed in Vietnam, Indonesia, and Singapore view their political environment positively influencing the economy.
Singapore faces the highest inflation rate among the surveyed markets. 92% of consumers surveyed in Singapore reported a rise in living costs in 2023, which the report suggests is behind a cautious approach to consumer spending. The report indicates a region-wide trend of inflationary pressures: the lowest proportion of consumers reporting an increase was found in Thailand where three quarters (76%) still reported increased living costs.
As Asia continues to drive global economic growth, its economic sentiments significantly shape consumer spending behaviour. Research indicates a strong intention to increase spending across most Asian markets, with Indonesia leading the way as nearly 80% of respondents express a desire to boost their spending in the next 12 months. Conversely, sentiment in Singapore signals a more restrained approach, with 59% of respondents planning to increase their spending.
The report's insights have delineated three distinct tiers of spending priorities, mirroring the evolving consumer inclinations and aspirations prevalent in Asian markets. These tiers encompass a diverse array of lifestyle categories, practical investments, indulgences and aspirational acquisitions, all shaped by a confluence of factors including the lingering impacts of the pandemic, cultural preferences, economic landscapes and societal influences. Across Singapore, Hong Kong, Indonesia, Thailand, Malaysia and Vietnam, there is a noticeable emphasis on lifestyle essentials such as food and beverage, health and wellness and travel. Trends observed over the past year signal a perceptible shift in mindset catalysed by the pandemic, with populations increasingly valuing overall wellbeing and the pursuit of enriched life experiences. This shift is translating into a reorientation of budgets towards experiences and activities that enhance quality of life and contribute to a more fulfilling lifestyle.
Simon Tye, CEO of MDRi, commented: "The Sentiments Report offers a wide-ranging snapshot of economic confidence across Asia, from Indonesia's significant optimism to the sophisticated luxury spending in Singapore and Hong Kong. These insights are crucial for businesses as they navigate Asia's economic landscape, which is marked by a blend of optimism and, in some instances, caution. Getting to grips with these economic trends is essential for capitalising on opportunities and tackling challenges that arise in future."
Notes:
The Sentiments Report is designed for business leaders, investors, and policymakers who require a deep understanding of Asia's economic sentiments. It encourages readers to utilise the detailed findings and statistics to make informed and strategic decisions in the Asian marketplace.
- The report is based on a survey conducted by MDRi in February 2024, assessing the views of consumers in six key markets in the Asia Pacific region: Hong Kong, Singapore, Malaysia, Thailand, Vietnam and Indonesia.
- The survey engaged a total of 3,000 participants, with an equal sample size of 500 individuals from each market, to ensure a balanced representation of the demographic distribution within the respective territories.
- The report also includes insights from the World Economic Forum (WEF) and the International Monetary Fund (IMF) on global economic conditions and forecasts.
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