With fuel and food price hike and the world going through an economic crisis, 40 per cent of the people in a study said that they expect their disposable income to fall over the next year. This is larger than the proportion who expect their disposable income to stay the same (31 per cent) or increase (22 per cent), the study from IPSOS, Global leader in market research.
In the study, the IPSOS said that the expectation of falling incomes is highest in Turkey (58 per cent). France with 55 per cent, Great Britain with 54 per cent and Hungary 50 per cent follow Turkey. On the other hand, the report mentions that 48 per cent in India, 42 per cent in Saudi Arabia and 40per cent in South Africa are most optimistic about their disposable income rising.
The IPSOS in the study notes that Latin Americans are more likely to report struggling with the cost of living. Across the 28 countries, three in ten report finding it difficult to get by financially (29 per cent) and the same proportion say they are just about getting by (30 per cent). People in Argentina are the most likely to be struggling, with two thirds (66%) finding it difficult to get by. While people in Turkey are close behind on 64%, the rest of the top five countries reporting financial challenges are also from Latin America: 51% in Chile, 49% in Brazil and 48% in Peru.
ECONOMIC CRISIS; CURRENT SITUATION
Over one in ten of the people across the globe feel they are living comfortably, including 28 per cent of Chinese citizens and 27 per cent of Swedes. Meanwhile, three quarters of people are concerned about the cost of goods and services increasing over the next six months. This includes 91 per cent of Hungarians, 88 per cent of those in South Africa and 86 per cent of Argentines. Even in China where the concern is lowest, 45 per cent say this is a worry over the next half year.
Other Concerns include;
- 56% are concerned about their ability to pay energy bills: emerging markets top the list with 79% of South Africans and 73% of Indians saying they see this as a concern, followed by Turkey (71%) and Argentina (70%) and Chile (69%). Among established economies, concern about energy bills is highest in Great Britain, where 67% are worried about their ability to pay utility bills.
- 54% worry about their ability to buy the things they are used to buying, led by Turkey (80%), South Africa (73%) and Argentina (69%). The Chinese (28%) and Dutch (33%) are least likely to say they are concerned about this.
ECONOMIC CRISIS; PERSONAL CONCERNS
- Three quarters expect the cost of food to rise(76%), including 92% of Hungarians, 89% of Swedes and 88% of Turkish citizens. Just under three quarters expect the cost of other shopping to increase as well (72%).
- A similar proportion expect gas and electricity costs to increase (73%): Turks top the list with 87% expecting this to be the case, followed by Argentines (86%) and Poles (86%). Britons are most likely of any country to say they think the cost of gas and electricity will increase substantially: 65% expect it to increase “a lot” over the next six months.
- Seven in ten (71%) expect motoring fuel costs to increase. This is a particular concern in Chile and Korea where it is seen as the area where price rises are most likely. But the countries where the largest proportion say they expect an increase in fuel costs are Turkey (84%), Argentina (83%) and Poland (81%).
Ben Page, CEO of Ipsos, said:“Inflation is the biggest worry worldwide and the global public expects things to get worse. And while countries with more recent experience of high inflation such as Turkey and Latin American countries tend to be most pessimistic, European countries and the US are not far behind.
At this point the consumer reaction is still focused on cutting discretionary spending and postponing large purchases, and we know from other Ipsos research that all categories are suffering as people focus on food and fuel. The proportion seeking higher-paid work or asking for a raise from their employer remains comparatively low but if high inflation becomes more than a 2-year phenomenon, we expect this to change”
ECONOMIC CRISIS; EXPECTATIONS FOR SPENDING
The study said that six in ten people say that price rises in food shopping would have the most negative impact on their quality of life.
ECONOMIC CRISIS; CONSUMERS REACT
The study said that they found consumers focussing on cutting discretionary spending. In the face of rising costs which make their normal lifestyle unaffordable, almost half of the people said they would spend less money on socialising (46%). About 44 per cent said that they would delay large purchase decisions. Meanwhile, 37 per cent opined that they would spend less on holidays and 36 per cent wouldgo for a cut on household shopping.
The IPSOS also found thatthree in ten people would use less energy or drive less to conserve fuel A quarter would look to economise on food (26%) and just one in ten would move into cheaper accommodation, the IPSOS said in the study.
ECONOMIC CRISIS; CHANGES IN EMPLOYMENT
Across the 28 countries surveyed, the IPSOS said that only twelve per cent were looking for higher-paid work with another employer if rising costs made their normal lifestyle unaffordable. Meanwhile, eight per cent say they would ask for a pay rise from their employer in this situation. These views are similar looking only at those in work: among the employed, 12% say they would ask for a pay rise and 18% would look for higher paid work.
ECONOMIC CRISIS; DRIVING RISING PRICES
Most of the European countries blamed Russia’s invasion of Ukraine as a contributing factor to inflation. This is ranked as the biggest driver in Belgium, Germany, Denmark, France, Hungary, the Netherlands and Sweden. It is also held as the biggest driver of cost increases in South Korea.
In Asian countries, COVID-19 is ranked as the biggest contributor. Those living in China, Malaysia and Saudi Arabia put it ahead of other factors in having a great deal or a fair amount of a role in driving the rising cost of living, as do people in Brazil.
In Turkey the view is different: Immigration is seen as the biggest driver of cost increases, followed by interest rates and the policies of the national government.