Surveying Economic Sentiment and Strategies for Managing Rising Costs Across ASEAN
As the economies of Southeast Asia continue to evolve, understanding the economic sentiment and cost-of-living adjustments among its citizens provides valuable insights into the region's socio-economic landscape. To explore this, we spoke to over 3,000 respondents across Singapore, Malaysia, Philippines, Thailand, Vietnam, and Indonesia. Our latest Blackbox-CINT ASEANScan reveals intriguing patterns in economic outlook and consumer behavior across ASEAN countries. This article delves into these insights, exploring how perceptions of economic conditions and rising living costs are shaping lives across the region.
Weighing Optimism and Concern in Economic Sentiment
Economic sentiment varies significantly across ASEAN nations, reflecting diverse local and global economic influences. ASEANScan data highlights notable trends in how residents of Southeast Asian countries perceive their national economies, the global economy, and their personal financial situations have changed in the last 12 months.
Singaporeans and Vietnamese stand out as the most optimistic among ASEAN countries when evaluating economic conditions. In contrast, Filipinos, Indonesians, Malaysians and Thais express concern regarding economic and financial matters.
National Economy: Singaporeans and Vietnamese report a more positive view of their national economies compared to a year ago. In Singapore, 56% of people believe the economy has improved over the past 12 months. The optimism is even stronger in Vietnam, where over half of the population shares this positive view. This optimism can be attributed to robust economic policies, strategic global trade relationships, and effective pandemic management that have fostered economic resilience.
Citizens in the remaining four countries of our study are more apprehensive about the current state of their national economies. Fewer than one in three believe that their country is better off now than 12 months ago. For example, a mere 17.5% of Thais share this sentiment. This concern could be caused by challenges such as political instability, slower economic recovery post-pandemic, and inflationary pressures.
Global Economy: Again, it is Singaporeans and Vietnamese who demonstrate the most upbeat perspective. Two in five Singaporeans (40%) are confident that the global economy has improved compared to 12 months ago, whereas almost half of Vietnamese (45%) believe this to be so. This can be linked to their strong trade networks and adaptability in global markets, which act to buffer them against international economic fluctuations.
For citizens of the Philippines, Thailand, Malaysia and Indonesia, they perceive the global economic outlook to be less favourable. In Malaysia and Thailand, the number of people who believe the global economy has worsened is nearly twice as high as those who think it has improved. For example, in Thailand, only 21% are optimistic about the global economy, while 47% are pessimistic. Factors like global supply chain disruptions and geopolitical tensions could be contributing to their pessimistic views.
Personal Financial Situation: When it comes to personal finances, about half of residents of Singapore and Vietnam feel relatively secure in their personal financial situations, reflecting stable employment, rising incomes, and effective personal financial management.
Across the rest of Southeast Asia, the picture is less rosy; about one in three Filipinos, Malaysians, Thais, and Vietnamese report heightened anxiety about their personal finances, driven by rising costs of living and economic uncertainty.
Southeast Asians Taking Practical Approaches to Combat Costs and Inflation
The rising cost of living and inflation have prompted substantial changes in consumer behavior across ASEAN. A significant 97% of people in ASEAN have modified their spending behavior in response to inflation. This widespread adjustment underscores the impact of rising prices on daily life.
ASEANScan offered respondents a variety of options for managing the cost of living, and our data highlights the top three strategies employed by consumers to manage increased living costs:
Looking for Cheaper Purchase Options Online: A majority of consumers are turning to online shopping for better deals.
Cutting Back on Non-Critical Lifestyle Spending: Many people are reducing their expenditure on non-essential items such as dining out, entertainment, and leisure activities.
Seeking Discounts and Cut-Price Offers More Deliberately: More than half of consumers are becoming more strategic in their shopping habits by actively seeking out discounts and promotional offers.
Collectively, these adjustments in spending habits reflect a practical approach to managing financial pressures while maintaining essential needs. The convenience and competitiveness of online shopping have become a key factor, offering a viable alternative to traditional retail by making it easier for consumers to compare prices and find discounts. Simultaneously, many are cutting back on non-essential spending, such as dining out and entertainment, in favour of prioritising essential expenses and adopting a more cautious approach to discretionary spending. Additionally, more than half of consumers are strategically seeking out discounts and promotional offers, further stretching their budgets and mitigating the financial impact of inflation.
Vacationing: A Resilient Priority
Interestingly, despite financial pressures, vacations seem relatively resilient to cuts, with fewer than one-in-five (19%) respondents indicating they have stopped vacationing altogether. This suggests that while consumers are adjusting their spending in many areas, they still value leisure and travel experiences, albeit possibly on a more budget-conscious scale.
Conclusion: Economic Sentiment Mixed Across ASEAN As Cost-of-Living Continues to Bite
Economic sentiment and cost-of-living adjustments across ASEAN reveal a complex and varied landscape. Singapore and Vietnam showcase a more optimistic outlook, buoyed by favourable economic conditions, more stable personal finances, and effective governance. In contrast, Malaysia, the Philippines, Thailand, and Vietnam grapple with economic uncertainty and financial concerns, influencing their more muted economic sentiment.
The data on cost-of-living adjustments illustrates how consumers across the region are responding to inflation and rising prices. There have been widespread changes in spending behaviour, including a shift towards online shopping, reduced discretionary spending, and a more deliberate search for discounts, reflecting the commitment to practical, everyday measures people are taking to manage their finances. (However, try and take away our vacations at your peril!)
As the economic landscape continues to evolve, monitoring these trends will be crucial for understanding regional economic health and consumer behaviour in ASEAN.
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