How do International Financial Decision Makers View the Economy?

In spite of cultural differences, the international financial decision makers from the United States, United Kingdom, Singapore, India, Germany, and Australia share similar concerns when it comes to economics, particularly in the light of Covid-19. This virus has affected different countries in different ways, however, making for a few differences in the overall outlook.

Take a look at what a recent survey said about consumer sentiment in these countries.

United States of America (USA)

Since September 2021, financial decision-makers from the United States have experienced slowly declining rates of confidence in the economic outlook for the country. While 57 percent of these consumers believe that their personal financial situation is “strong or somewhat strong” nearly 33 percent of households have reported that they are dipping into their savings.

Furthermore, almost half say that they are starting to cut back on household spending. A similar number of people also have concerns about the long-term security of their jobs. These figures explain why nearly 65 percent of American consumers are reporting that they feel pessimistic about the future of the economy.

Looking at general numbers, it seems as if student loans and short-term loans are reporting higher rates of overall delinquency, leading to the idea that there is a growing class divide among American consumers. These numbers suggest that while a growing number of people from all walks of life are becoming more pessimistic about the economy, there is a large portion of Americans believe that they will be able to “weather the storm” by using their savings. Consumers without any savings, however, are already feeling pressure from rising inflation.

United Kingdom (UK)

The UK nearly unanimously agree that the current economy is weak or neutral, but many of them see the potential for it to improve over the next several months. On a more personal level, about half of these people describe their current financial situation as weak, with many expecting it to remain that way over the coming months. Just a few expect it to get worse in the future. Nearly half of the consumers have decreased their usage of cash, and a quarter has started to use electronic payments more frequently.

This implies that there is a growing reliance on credit in the UK, but many people expect that it will only be a temporary situation.

Singapore

Similar to the sentiment in the UK, a majority of Singaporeans view the current economy as weak or neutral. Unlike the UK, however, they expect it to remain about the same or get incrementally worse over the next three months. Fifty percent of consumers are concerned about their job security and they report that they have less than eight months of savings to live off of while they look for a new job. It is still too early to determine if this widespread joblessness will lead to increased savings and decreased spending.

Since the beginning of the pandemic, contactless payments have seen an increase in usage. Many consumers claim that they will continue to use these services. This tends to signal that there is overall confidence in the banking system.

India

Indian consumers and financial decision-makers tend to view the economy as weak or neutral, but there is a widespread belief that it will start to improve over the next several months. Most troubling, three-quarters of the population are “concerned or somewhat concerned” about their job security, although this number is down from a high of 80 percent in September of 2021. The savings rate is high, with nearly two-thirds of respondents reporting that they have over eight months of savings to live off.

In general, Indian consumers have an optimistic outlook on financial recovery, with nearly two-thirds stating that the economy will rebound within the next few months and grow to be just as strong as it was before COVID-19. Indian confidence in the banking system is generally high, much higher than it is in most developed countries.

Germany

The majority of German financial professionals view the current state of the economy as weak or neutral, but only 15% of them expect the economic situation will improve in the next several months. Over half of the respondents described their personal financial situation as “weak or somewhat weak”. An overwhelming majority of these respondents expect it to stay that way over the next several months.

Concerns over job security have a lot to do with this sentiment, with nearly a third of consumers expressing worries about their job stability. Only 40% of respondents reported that they have around four months of savings, but the country’s generous safety net makes fears of widespread poverty virtually non-existent.

Few Germans have any concerns about their banking system, however. Despite the strong feeling of pessimism towards the economy both in general and on an individual basis, there are no widespread signs of a significant decrease in consumer spending.

Australia

Almost all financial experts in Australia view the current economy as neutral or weak and most of them expect it to remain the same or weaken in the next several months. Nearly half of the consumers are “concerned or somewhat concerned” about the overall security of their job. This is a slight decrease from the over fifty percent who expressed this in April of 2021.

Less than half of consumers stated that they have four months of living expenses in savings to live off, which is actually a nine percent improvement in this metric since June of 2021. Faith in the banking system is high, but consumers do seem to be cutting cash payments in favor of a slightly heavier reliance on short-term credit.

This likely means that most Australians are starting to see their economy recover from Covid, but have serious concerns about the strength of that recovery in light of other economic pressures.

Generally speaking, consumers all over the world currently view the overall economy as weak or neutral, with many of them rating their personal economic situation as slightly weak. Outlook for the future has the most variation between countries, with drastically carrying levels of optimism vs. pessimism.

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