Consumers continue to save for a ‘Rainy Day’ despite recovery
Consumers across the Asia-Pacific, West Asia and Africa are still showing signs of restraint when it comes to spending despite signs of revival across the board, says a MasterCard survey.
New Delhi: Consumers across the Asia-Pacific, West Asia and Africa are still showing signs of restraint when it comes to spending despite signs of revival across the board, says a MasterCard survey.
Interestingly, it is the younger set of consumers who are more enthusiastic about saving, the survey found. In India, those in the 18-29 age bracket are most concerned about saving for a rainy day.
According to the MasterCard survey on consumers` saving priorities, consumers across the Asia Pacific, West Asia and Africa are feeling more optimistic about the six months ahead, but many are not letting up in terms of stocking up their coffers.
"While we have seen that consumers across this region (Asia-Pacific) have turned cautiously optimistic about the economy, they remain nevertheless concerned with the region`s near term economic outlook," MasterCard Worldwide economic advisor, Asia/Pacific Yuwa Hedrick-Wong said.
Hence, precautionary savings are staying relatively high in the regions, which in turn implies that some downward pressure on future consumption will persist, Hedrick-Wong added.
The main reason behind the increasing trend towards savings are uncertainty over the economy, which was cited by 74 per cent of respondents, followed by investing purposes (44 per cent ), buying or upgrading property (37 per cent ) and retirement (30 per cent ).
Over 40 per cent said they are planning to save more in the next six months.
Hedrick-Wong said from an economic perspective, saving intentions can be categorised in two distinctively different ways. The first are saving intentions that lead to future consumption, typically for large expenditures such as purchase and/or upgrade of properties, autos, and for retirement.
"This type of savings (saving intentions that lead to future consumption) has continued to be a key driver of savings behaviour across the Asia/Pacific region," he said.
On the other hand, savings for precautionary purposes subtract absolutely from present and future consumption when consumers feel the need to save more of their current income because they worry about the future.
The survey was conducted from October 1 to November 9, 2009 and covered 10,623 consumers from the three regions.
Around 28 per cent of the region’s consumers save between 1-10 per cent of their income, while 23 per cent save 11-20 per cent of their income. Five per cent of the region`s consumers do not intend to save any of their income.
The highest percentage of consumers who said they plan to save more in the coming six months are from Nigeria (85 per cent), the Philippines (67 per cent), Indonesia (64 per cent), Thailand (56 per cent) and Qatar (52 per cent).
Kenya, on the other hand, has the highest percentage of respondents (42 per cent) reporting that they plan to save less, followed by Lebanon (41 per cent).