CONSUMER CONFIDENCE AND ECONOMIC OUTLOOK ACROSS 22 COUNTRIES

CITIZENS' PERSPECTIVES ON TRADE ISSUES

1 January 1999

CONSUMER CONFIDENCE AND ECONOMIC OUTLOOK ACROSS 22 COUNTRIES

CITIZENS' PERSPECTIVES ON TRADE ISSUES These results emerged from an international public opinion survey conducted by the Angus Reid Group on behalf of The Economist. This poll involved interviews among a total of 12,741 adults in 22 countries. Data collection was carried out in November and December of 1998.

The target sample size was 500 for each country, with the exception of a 1,000 sample size in the United States, Russia and Italy. In 13 of these 22 countries, a full national probability sample was used. The other nine countries involved urban-only sampling, and three of these samples (India, Indonesia, Mexico) targetted the middle and upper socio-economic classes. In-person interviewing was used for all urban-only samples except Mexico where telephone interviewing was used; all the national samples were surveyed via telephone interview. The complete data set was statistically weighted so that the overall survey results reflect the proportional populations of the countries/urban areas in the sample.

The Angus Reid Group is Canada's premier market research and public opinion polling firm with offices across Canada and the United States. The company also provides international clients with a regularly-scheduled quarterly global polling program wherein upwards of 30 countries over a two-month timeframe are sampled for opinions on private sector and public matters. The Angus Reid Group also publishes, on a quarterly basis, the World Monitor - a digest of world public opinion trends and insights gleaned from its world polling activities.

London-based The Economist is an international weekly - covering world politics, business, finance, science and the arts - and is read by more of the world's top national and business leaders than any other magazine.

THE ECONOMIST/ANGUS REID WORLD POLL

CONSUMER CONFIDENCE AND ECONOMIC OUTLOOK ACROSS 22 COUNTRIES

The Economist/Angus Reid World Poll, conducted in 22 countries during November and December of 1998, examined citizens' assessment of their current national economies, changes in their personal standard of living over the past year, and their one-year outlook for their national economies as well as for economic conditions at the global level. This international survey also looked at the global community's perspectives on placing tighter restrictions on currency flows, and at public confidence in selected international institutions.

ASSESSMENT OF CURRENT STATE OF NATIONAL ECONOMY

Consumers' assessment of their respective national economies varies markedly around the world. In general, North Americans, Europeans and Australians award their economies good marks while residents of Asia and Latin America give their economies failing grades. (Table 1)
Consumer confidence is strongest in the U.S. where fully 85 percent of consumers surveyed described the economy as "good" or "very good." The Americans are followed by two-thirds of Canadians (64%) and Australians (67%), and by a majority of consumers from four of the six European countries surveyed - Germany (66%), Spain (66%), France (58%) and the United Kingdom (53%). In contrast to its Asian cousins, Malaysia joins this select group of nations - two in three (68%) say their country's economy is presently in "good/very good" shape.
Meanwhile, a solid majority of surveyed consumers from the other nine Asian countries surveyed rated their national economies as "poor" or "very poor." This includes fully 91 percent of Japanese consumers surveyed (half are very critical). And Russian consumers are almost unanimous in their assessment - 98 percent gave the Russian economy a "thumbs down" (almost two-thirds opted for the "very poor" rating). Negative ratings of their respective national economies were also provided by over half of consumers polled from urban Latin America (Brazil, Chile and Mexico) and also by a slim majority of Italians.

ONE-YEAR OUTLOOK FOR THE NATIONAL ECONOMY

Although most Asian consumers give a "thumbs down" to their national economies today, there is a good deal of optimism in many of these countries with respect to the year ahead. A full majority of consumers from four of the ten Asian countries polled expect economic conditions to improve during the coming year, including: urban Chinese (56%), urban Indonesians (50%), Malaysians (65%) and urban Thailand residents (52%). And in most other Asian countries a plurality of consumers expect improvement. Significantly, Japan is not included among this list of optimistic Asian countries: only one in ten (11%) Japanese surveyed anticipate improvement versus 36 percent who foresee worse times ahead for their economy. (Table 1)
Most pessimistic about national economic prospects for the year ahead are consumers from urban Mexico (60% expect it to get worse), followed by those from urban Russia (43%) and from the U.K. (40%).

PERSONAL STANDARD OF LIVING OVER THE PAST YEAR

And which countries' citizens have felt the past year's economic woes the most? Survey respondents were asked whether their own standard of living has improved, stayed the same or worsened during the past year. The percentage who reported "improved" exceeded the percentage who indicated "worsened" in only eight of the 22 polled countries: this list was led by the U.S. (36% versus 11%) and also included Australia, Canada, urban Brazil, Spain, urban China, urban India and the Philippines. (Table 2)
But in 11 of these 22 countries, consumers are more likely to say their standard of living has declined rather than improved. Most negative was Russia: 72 percent said their personal standard of living has deteriorated over the past year, followed by South Korea (69%) and, to a lesser degree, Thailand (45%).

OUTLOOK FOR THE GLOBAL ECONOMY

In addition to their positive outlook for their national economies, residents of many Asian countries are also optimistic about the prospects for the global economy in 1999. In half of the ten Asian countries surveyed - Thailand, China, Malaysia, Indonesia and India - at least two in five residents surveyed expected economic conditions at the international level to improve over the coming year. Once again, the Japanese are a notable exception: only 4 percent expect improvement versus 39 percent who feel the global economy will get worse in 1999. (Table 3)
Meanwhile, residents of the U.S., who have the most favourable perspectives when it comes to their country's state of the economy and their own standard of living, are less assured when they look at economic conditions beyond their borders. A sizable plurality (41%) of Americans believe the coming year will bring more bad news for the global economy. Their concern is shared by even larger numbers of people in the U.K. (48%) and Australia (46%).

SUPPORT FOR TIGHTER RESTRICTIONS ON INTERNATIONAL MONEY FLOW

There is a lot of support in many different countries for tighter restrictions on the movement of money from country to country: just shy of one-half (49%) of the entire survey sample said tighter restrictions are necessary, 37 percent said they are not necessary and 14 percent were unsure. (Table 4)
Public support for tighter restrictions was found in 17 of the 22 countries included in this international survey. The most enthusiastic reaction to this idea was voiced by surveyed residents of Indonesia (77%) Thailand (74%), Malaysia (71%) and Russia (71%).
Only in Spain (56%) and Italy (46%) did most consumers object to placing tighter restrictions on international capital flow.

CONFIDENCE IN SELECTED INTERNATIONAL BODIES

People participating in The Economist/ Angus Reid World Poll were asked how much confidence they have in each of four selected bodies when it comes to addressing and improving economic problems at the global level. Interestingly, each of the four assessed bodies inspired confidence among less than half of the total survey sample. Overall, residents of Italy and the Philippines express the most confidence in these bodies, in sharpest contrast to their cynical Asian counterparts in Taiwan, South Korea, Hong Kong and Japan.

These findings are highlighted below in descending order of the public confidence engendered by these four institutions: (Table 5)

The United States - Four in ten (42%) of all survey respondents said they have "a lot" (14%) or "a fair amount" (28%) of confidence in the United States in terms of its efforts to address global economic problems. One-half (49%) voiced little or no confidence (30% "only some", 19% "not much at all"). As may be expected, confidence was highest among Americans (73%), but it was also fairly strong among residents of Italy (65%), the Philippines (64%), Canada (50%) and the U.K. (48%).
The United Nations - Almost as many (39%) international respondents indicated confidence in the United Nations (only 9% a lot), but a slim majority did not (32% only some, 19% not much at all). In only five of the 22 countries did a majority report at least a fair amount of confidence in this international body - the Philippines (74%), Italy (64%), Indonesia (63%), France (55%) and the U.S. (50%).
The World Bank - Around one in three (31%) of those polled reported having a significant degree of confidence in the World Bank (only 5% a lot), compared to half who did not (33% only some, 19% not much at all). Only in four countries did roughly one-half or more express confidence in this financial body's ability to deal with global economic problems - the Philippines (61%), Indonesia (58%), India (49%) and Italy (48%).
The International Monetary Fund - This financial body emerged with the lowest public-confidence rating: 28 percent (only 5% a lot) versus 53 percent of respondents who were skeptical of its ability to address the world's economic problems (32% only some, 21% not much at all). Public confidence in the IMF was indicated by a majority of respondents only in Italy (52%), Indonesia (51%) and the Philippines (50%). Its biggest critics were found in Mexico (82% not much/no confidence), South Korea (76%), and Germany (69%), but a full majority in 10 other countries were skeptical about the IMF.

For further information about this poll, please contact:

John Wright, Senior Vice President The Angus Reid Group (416) 324-2900 Email: [email protected]

The Economist: www.economist.com

CITIZENS' PERSPECTIVES ON TRADE ISSUES

These results emerged from an international public opinion survey conducted by the Angus Reid Group on behalf of The Economist. This poll involved interviews among a total of 12,741 adults in 22 countries. Data collection was carried out in November and December of 1998.

CITIZENS' PERSPECTIVES ON TRADE ISSUES

The Economist/Angus Reid World Poll, conducted in 22 countries during November and December of 1998, examined citizens' perspectives on free trade versus protectionism. People were asked whether they felt their own country's economic and employment situation would be best served by protecting local industries through import restrictions or by increasing international trade through reduced import restrictions. This international survey found that citizens' perspectives on the benefits or costs of foreign trade to their respective national economies vary markedly around the world.

WHAT IS THE BEST ROUTE TO PROSPERITY? THE TRADERS

In six of the 22 countries polled, a majority of citizens favored expanded foreign trade as the best route to prosperity: South Korea (59%), Taiwan (57%), Germany (53%), Thailand (52%) and Japan (51%). A majority of Hong Kong residents (50%) would also opt for increasing international trade. Compared to a similar poll taken a year ago, support for free trade has increased markedly in both South Korea and Thailand, but has ebbed in Taiwan.

WHAT IS THE BEST ROUTE TO PROSPERITY? THE DIVIDED

Of the 22 countries included in this international survey, citizens in five countries are basically divided regarding the trade approach which would best improve their own country's economic and employment situation: China, Mexico, Spain, Canada and France. The two European countries in this group - Spain and France - are more pro free trade than a year ago, while Canadians have become somewhat more protectionist.

WHAT IS THE BEST ROUTE TO PROSPERITY? THE PROTECTIONISTS

In half of the 22 countries polled, a majority or a large plurality of citizens would favour protection as the best way to improve their national economy.
The strongest protectionist sentiment was found in: Indonesia (71%), Malaysia (69%), Russia (60%), and the Philippines (63%), hefty majorities in each case. And in Indonesia and Malaysia this is an increase in the number of protectionists since late 1997.
Other countries in which a majority of citizens favor protecting local industries rather than increasing foreign trade include: Australia (57%), the U.S. (56%), Chile (55%), India (55%) and the U.K. (53%). Sizable pluralities in Brazil (49%) and Italy (48%) also supported protectionism over expanded trade.

For further information about this poll, please contact:

John Wright, Senior Vice President The Angus Reid Group (416) 324-2900 Email: [email protected]

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