HONG KONG: A major factor in Asia's strong recovery from the global economic downturn is the increased willingness of consumers to spend more on goods and services, economists have suggested.
The International Monetary Fund has forecast that Asian economies will expand by 7.3% in 2010, far outstripping the global average of 3.1%, with China, India and South Korea all likely star performers.
Government stimulus programmes, including tax cuts and extra infrastructure projects, have contributed to the recovery over recent months, either by boosting personal wealth or reducing unemployment.
Societal trends have also played their part, with Asian personal debt levels tending to be lower than those of Western nations, and households also retaining significant cash savings to fall back on in tough times.
As such, many consumers have been able to maintain or even increase their spending in the downturn, while their indebted counterparts in the US and Europe have concentrated on paying off their existing loans and credit card balances.
"Chinese consumers are buying [and] job prospects are good," Dong Tao, regional Asia economist for Credit Suisse, said.
"Households have now become a driver in the recovery," Frederic Neumann, Asia economist for HSBC, added.
As well as driving growth, increased domestic private consumption of goods and services could help to rebalance the continent's export-led economies, rendering them more self-supporting over the long-term.
China's domestic consumption currently makes up around one-third of total GDP, far lower than the ratios of over 50% observed across much of the developed world.
Data sourced from Wall Street Journal; additional content by Warc staff