Household spending in Asia is rebounding and will support the region's recovery from the current global meltdown, according to a study issued Wednesday by the British banking giant HSBC Bank Plc.
"After a deep slump in growth and confidence, households have opened their wallets again and are becoming an important driver of economic growth for the region," the HSBC said in its macroeconomic research Asian Chartbook dated December 8.
The bank cited the turnaround in car sales across the region, with such purchases rising at double-digit rates in China, India, the Philippines, South Korea and Vietnam.
The HSBC said China and Vietnam were leading the way in terms of vehicle sales growth, but noted that Indian, Philippine and Korean markets were also robust.
"The strength in consumption largely reflects the resilience of the regional labor markets, where unemployment rates have fallen now everywhere and job creation has accelerated strongly. As wages begin to rise again, we expect further good news on consumption to emerge," it said.
Domestic demand, including consumption, was usually tied to the performance of exports. But this time around, the HSBC noted that shoppers are opening up their wallets even if exports are not rebounding yet.
The HSBC said Asia's high frequency proxy for real retail sales pushed further into positive growth territory in October, mirroring a recovery in consumer confidence across the board.
The bank concluded that the Asian consumer was starting to pull weight again. This will boost overall growth for the consumption- driven Asian economies.
