The view from here – global economic perspectives

This October, the International Monetary Fund published its latest review of the global economy, predicting a slowdown in growth this year to 3.1% (from 3.4% in 2014). In its understated way, the IMF noted that “prospects across the main countries and regions remain uneven”.1

“Uneven” is a certainly a good descriptor of what we’ve witnessed when tracking consumer confidence around the world.

Each month we ask people around the world to give their assessment as to whether the economy in their country is in “good” or “poor” shape.2

Looking across all 24 countries, the global “feelgood” score currently stands at 39%, which is very much in line with the situation five years ago.

But this is no boring time series. Perspectives vary dramatically depending on where you live. And, in contrast to many aspects of life and society,3 the economy is an area where perceptions are often very closely linked to the reality.

As 2015 comes to a close, we find 90% of online consumers in Saudi Arabia giving their economy a positive score. Falling oil prices and rising government deficits are yet to stir alarm bells. Their economy is still felt to be in “good shape”.

At the bottom of the league table we have Brazil, where positive sentiment has tumbled from 66% positive a few years ago to just 8%.

Britain emerges as a clear winner. In summer 2010, with the Coalition Government newly in place, just 13% of Britons gave their economy a “good” rating. That figure remained stubbornly low for three years. But since 2013, the picture has been one of steady improvement. As 2015 comes to an end, 48% of us give the UK economy the thumbs up – a figure greater than the combined scores of France, Italy and Spain.

Germany’s position at the head of the G7 table is no surprise. Three in four Germans say their economy is in “good” shape. And, as we have seen in 2015, many migrants coming to Europe from less fortunate regions head straight there for this reason.

Had the migrant crisis taken place five years ago the picture could have been somewhat different. In summer 2010, just 38% of Germans said their economy was in a good place – still better than many of its neighbours, although hardly a stellar score. But as Germany’s performance has improved (to 73% today), those in France, Italy, Spain have flat-lined, registering positive scores that are barely into the low teens.

What about the so-called BRICs? They disappoint Goldman Sachs these days. Our survey provides another example of why it may be less than helpful to group Brazil, Russia, India and China into a single category. 

Let’s start with Russia. Eighteen months ago, in the wake of the Sochi Olympics, a majority of Russians were saying their economy was in “good shape”. Today that figure stands at 30%. Our own research in Russia paints a picture of a population in no doubt that their country faces a real crisis, even if patriotic stoicism means sentiment has not entirely collapsed. Even when the IMF expects to see the Russian economy contract by four percentage points in 2015.

Perhaps the biggest star in our review of consumer confidence is India. Just over two years ago, the proportion giving the economy a “good” rating was 40%. Now that figure stands at 82%, powered by a predicted 7.5% increase in GDP this year.4 Meanwhile, the slowdown in China’s performance is yet to show in our figures.

Which brings us back to Brazil, where the collapse in confidence has directly tracked Brazil’s economic performance – which has seen an about-turn from the 6% GDP growth recorded in 2010 to the 3% decline expected this year. Our Brazil Flair report5 charts the country’s myriad of problems with middle class ‘impoverishment’ set alongside a profound political and social crisis.

‘Disenchantment, Pragmatism and Hope’ is the title of that Ipsos report on Brazil. And, whatever its current difficulties, hope is indeed still in evidence when we look at Latin America’s largest economy. Looking ahead to the next six months, we find 52% of Brazilians expecting to see their economy improve over the next six months. Misplaced optimism? Throughout its recent crisis, our tracker has consistently recorded a high proportion of Brazilians remaining positive about the future.

Contrast that with the more taciturn British and Germans, among whom just 17% expect to see things get better in 2016. As so often is the case, the future depends on where you are looking at it from.


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