Consumer confidence across the Asia Pacific region has dropped seven points from six months ago, as a result of current economic volatility and the prospect of a global economic recession, according to the MasterCard Worldwide Index of Consumer Confidence.

Results from the latest survey released today reveal that consumers in the region are pessimistic about the six month period ahead. However, amongst the 14 countries surveyed, India along with China, Vietnam and Singapore have shown optimism in consumer confidence which will continue till early 2009.

The 16-year MasterCard Worldwide Index of Consumer Confidence is the Asia Pacific region's most comprehensive and longest running consumer confidence survey. Released twice a year, the Index is based on a survey which measures consumer confidence on prevailing expectation in the market for the next six months. It is calculated based upon percentage response figures, with zero as the most pessimistic, 100 as most optimistic and 50 as neutral. The latest survey was conducted from 1 September to 29 September 2008 and involved 6,019 consumers across 14 key Asia / Pacific markets.

T V Seshadri, vice president and country general manager South Asia, MasterCard Worldwide, said, ''We are pleased to announce the MasterCard Worldwide Index of Consumer Confidence for the Asia / Pacific region for the first half of 2009. The Index continues to be an important gauge to measure consumer sentiment and is part of MasterCard's overall commitment to be a source of knowledge for its customers, associates, and merchants as they grow their businesses across the region.''

India's current index score is 63.9 showing that consumers in India  though optimistic, are less so than six months ago (82.1) and a year ago (86.6). The score, is only slightly better than its historical average of 62.3, is India's lowest score since 2004.

Consumer sentiments have gone down on all five economic factors – employment, quality of life, regular income, stock market and the economy. Consumers are a lot less optimistic about Quality of Life (58.9 vs. 87.7 six months ago) and Employment (50.4 vs. 75.1). Other indicators, while also having declined from six months ago, show optimism: Economy (61.2 vs. 80.9), Regular Income (73.5 vs. 87.0) and Stock Market (75.5 vs. 79.8).

Reviewing the survey findings, Suman Bery, director-general, National Council for Applied Economic Research (NCAER), observed, "With the European and US economies in a deepening recession, the world is looking to Asia, particularly developing Asia, to provide the locomotive for global demand. In the past, the region's households were more known for their propensity to save. Today the question is, are they in a mood to spend, and can they replace the American consumer whose wealth and income are both under assault. The September date of the survey is significant. It coincides with the failure of the Lehman Brothers investment bank in the United States, an event which marked the start of the most dangerous phase of the global crisis for Asia, still unfolding. Since matters have worsened considerably since then, it is entirely likely that consumer confidence will continue to decline for a while longer.''

"Where India is concerned, the results show that consumer confidence in September 2008 is back to roughly its historic average after an extremely bullish phase over the past year. The results suggest that, as recently as September, Indian consumers still believed that India would be only mildly affected by the global downturn. Economic indicators released since then suggest that growth is slowing more rapidly than expected. On the political front, Indian cities continue to suffer from physical insecurity, most spectacularly demonstrated by the recent murderous attacks in South Mumbai. As against this, voter turnout levels and results from recent state elections suggest that Indian voters, both urban and rural, remain engaged and confident in constitutional mechanisms for addressing their problems", said Suman Bery.

Of the three cities surveyed in India, Bangalore scored the highest thus giving a boost to the overall score. Delhi and Mumbai have both seen a drop in consumer confidence over the past 12 months.

The survey reveals that the current Asia/Pacific consumer confidence score of 47.4 is significantly below the score six months ago (55.0) and a year ago (67.3), though it is higher than the average of 32.3 during the 1997-98 Asian economic crisis. Overall consumer outlook has also fallen across the five indicators that make up the Index compared to six months ago: Employment (41.2 vs. 54.2 six months ago), Economy (42.1 vs. 51.8 six months ago), Quality of Life (44.0 vs. 48.2 six months ago) and the Stock Market (45.5 vs. 53.4 six months ago) and Regular Income (64.3 vs. 72.2 six months ago).

Vietnam tops the Index of 14 markets in Asia/Pacific with a score of 88.1, the only market that has increased its score from six months ago (86.2). Vietnamese consumers are highly optimistic about Regular Income (94.7), Employment (91.2), Economy (88.2) and Quality of Life (86.9).

At the other end of the spectrum, nine markets are pessimistic about the first half of 2009, with Hong Kong (41.8 vs. 83.1 six months ago) and Taiwan (32.1 vs. 71.3 six months ago) recording the biggest declines. Three markets, although pessimistic, have marginally improved their consumer confidence scores compared to six months ago. These include Indonesia (38.5 vs. 36.7 six months ago), South Korea (31.4 vs. 27.7 six months ago) and Thailand (26.2 vs. 23.7 six months ago). Japan, at 17.2, is much more pessimistic than it was six months ago (29.0). Consumers from the Philippines (40.0), Malaysia (35.9) and New Zealand (33.7) are pessimistic.

(See: Country highlights of the survey)