Australian investors should be looking to east Asia for the most attractive emerging markets, with China and Indonesia topping the list for an optimistic outlook, a Credit Suisse survey has shown.
China emerged across a wide range of indicators as strongly positioned, despite some broader macro concerns about growth.
Credit Suisse’s fourth annual Emerging Markets Consumer Survey said for most people in China incomes are still climbing, with 40 per cent of respondents saying their income was better rather than worse.
The Credit Suisse Research Institute interviewed 16,000 people across nine emerging economies including China, Indonesia, South Africa, Brazil and India.
It found China is continuing its high levels of discretionary spending, especially on cars, holidays and smartphones, and is higher than other economies surveyed.
Despite a small slip in confidence from a year ago, Indonesia remains one of the most optimistic structural stories, with high optimism and strong momentum occurring regarding future income expectations.
Thirty-eight per cent of consumers showed confidence in their finances for the next six months stands, a 2 per cent drop from last year.
Around 44 per cent of those surveyed expect household income to improve in the next 12 months, building on strong growth in previous years.
Indonesians still spend more on food than other emerging countries, accounting for 35 per cent of the household budget. They spend higher on autos than other countries because of limited public transport.
On the other hand South Africa looked bleaker, with huge disparity between the haves and the have-nots.
High earners expect a 35 per cent improvement in their financial outlook but low income earners expect theirs to decline even further. Those earning around ZAR 1500 per month expect a 31 per cent drop in their personal finances.
