Retail sales across Australia are predicted to grow 4.5 per cent, compared to the same time last year, for the second half of 2008 according to the MasterCard Worldwide Index of Retail.
Retail spend in Australia is expected to reach $104.5 billion over the next six months, despite a significant slump in consumer confidence. According to the MasterCard Worldwide Index of Consumer Confidence, Australians have become increasingly pessimistic about the future, with confidence dropping 22.1 points to 42.8 in this survey. The outlook on quality of life saw the biggest drop for Australia, down 28.1 points to 32.7.
“The economic slowdown has become a major concern for many Australians, yet despite rising petrol prices and the risk of further interest rate rises by the big four banks, retail spending remains strong,” says Eddie Grobler, executive vice president, Australasia, MasterCard Worldwide.
“This is indicative of the strong period of economic growth Australia has experienced over the last decade. Australians may be feeling less confident as they hear about a possible slowdown in the economy, but they continue to manage their retail spending appropriately,” he says.
Across Asia/Pacific, retail sales are predicted to continue their strong showing for the second half of 2008 despite growing concerns surrounding the international financial market unrest.
All 12 Asia-Pacific markets are expected to continue seeing positive growth in retail sales, with China taking the lead once again as it did in the same reporting period last year. Retail sales in China are estimated to reach 5566 billion Yuan, representing a sturdy 18 per cent year-on-year growth. The outlook for Hong Kong continues to be bullish, with year-on-year growth predicted at 12.7 per cent. Other markets with strong growth set against the backdrop of subdued economic outlook include Indonesia, Malaysia and Philippines, with year-on-year growth expected to reach 12, 9.3 and 8.6 per cent respectively.
On the other hand, markets which continue to remain less bullish as during the last reporting period include Taiwan, New Zealand and Japan, with a year-on-year growth still present but expected to reach 2.9, 2.5 and 1 per cent, respectively.
“In spite of the global slowdown and its impacts on Asia, employment and income remain relatively strong in the region; supporting consumer spending. The projected growth in retail sales needs to be put in perspective by taking account of the rise in inflation in most markets in Asia, which means that in real terms the projected growth is less robust than indicated,” observes Dr Yuwa Hedrick-Wong, economic advisor, Asia-Pacific, MasterCard Worldwide.