Retail rise of just 3.9% seen

Worldwide Retail Index, released recently.

It is also forecast that higher global prices for fuel, food, commodities and cooking gas will drive inflation through the rest of the year.

Having reached 3.3 per cent in May, consumer prices are also likely to grow by 3.5 per cent for the year.

The MasterCard Worldwide Consumer Confidence Index for Thailand fell 20.5 points to 23.7 in this survey. Underpinned by softer economic growth, rising inflation, sluggish labour market conditions and weaker export growth, all indicators declined.

Meanwhile, retail sales across the Asia-Pacific region are predicted to continue their strong showing for the second half of 2008 despite growing concerns over volatility in international financial markets.

Asia-Pacific markets are expected to continue to see 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 5.6 billion yuan, or 18 per cent year-on-year growth.

The outlook for Hong Kong remains bullish, with year-on-year growth of 12.7 per cent predicted. Other markets with strong growth forecast against the backdrop of the subdued economic outlook include Indonesia, Malaysia and the Philippines, with year-on-year growth expected of 12 per cent, 9.3 per cent and 8.6 per cent respectively.

However, markets with less promising prospects include Taiwan, New Zealand and Japan, with slower year-on-year growth of 2.9 per cent, 2.5 per cent and 1 per cent, respectively.

"In spite of the global slowdown and its impact on Asia, employment and income remain relatively strong in the region, which is 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," said MasterCard's economic advisor, Yuwa Hedrick Wong.

The Index provides six-monthly forecasts of retail sales growth in 12 markets: Australia, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Taiwan and Thailand.