São Paulo – Brazilian consumers are the most optimistic regarding an increase in their income, out of the populations of eight emerging countries. So says the Emerging Consumer Survey, issued this week by the Credit Suisse Research Institute. The survey was conducted in 2011 among 14,000 people in Brazil, Russia, India and China (which comprise the so-called BRIC bloc), Saudi Arabia, Egypt, Turkey and Indonesia. Out of all those surveyed, 35% believe that their family income will increase. In Brazil, confidence is greater.
According to the report, 58% of Brazilians expressed optimism regarding their personal finances. “. On average, the Brazilian consumer is expecting one of the highest rates of household income growth among the countries surveyed, with the majority expecting increases in excess of 10%,” the document claims.
The survey also points out that Brazilians are not in the habit of saving money. Among those in the higher income brackets, only 7% of the family income is saved, and more than half claimed that they do not save money. According to the Credit Suisse, this can be explained by the strong perception on the part of Brazilians that real estate properties are more reliable assets.
“Property purchase intentions are higher here than for other countries and have increased over the year. 73% of respondents expect house prices to rise – higher than any of the BRIC countries.”
The Saudis are also among the most optimistic consumers. In Saudi Arabia, 37% of respondents stated that they believed their incomes would increase in the coming six months. They are betting on a 9% income rise. The oil price hike, which caused inflation in other countries, enabled the Arab country’s government to increase general spending. According to the report, the Saudi government pledged to spend US$ 130 billion on housing and job creation this year.
Unlike the Brazilians, the Saudis usually save more, at around 15% or their income. The Credit Suisse’s 2011 Global Wealth Report estimated that the total amount of wealth in Saudi Arabia increased from US$ 400 billion to US$ 600 billion last year. Their preferred savings method is also peculiar: gold and jewellery are preferred over the financial market.
Opposite to Brazilians and Saudis, the Egyptians are the most pessimistic out of those surveyed. Optimism in the North African country increased from 2010 to 2011, but still it remained the lowest of the eight nations. Conducted prior to the Arab Spring, the survey shows that Egyptian optimism rose from -5% to +8%.
The poorer and medium-income people saw an improvement over the highly negative perception which prevailed a year ago, whereas the rich saw an equivalent decline, as they were possibly those who benefited the most from the old regime, according to the report.
One of the main factors that detracted from confidence in Egypt is food prices. Food accounts for around 50% of Egyptians’ incomes. Spending on items such as fashion and cosmetics has increased, whereas property spending declined.
Of the remaining countries surveyed, India and China also boast high levels of optimism. Turkey and Russia, on the other hand, are among the most pessimistic nations. In addition to consumer confidence in the target countries, the report also features lists of enterprises whose stock the Credit Suisse advises investors to purchase. In Brazil, six companies were included, in the cosmetics, foodstuffs, beverages, clinical diagnosis, construction, and customer loyalty program industries.
*Translated by Gabriel Pomerancblum
