So far, Asia has been a bright spot in an otherwise gloomy global economic outlook. Is that about to change? The Wall Street Journal sees some worrying signs:
Koreans are buying fewer cars. Chinese consumers are cutting back on new clothes. There aren’t as many shoppers lining up outside Louis Vuitton boutiques in Hong Kong. Bets at the baccarat tables in casinos in Macau and Singapore—a proxy for Chinese tourism and consumer spending—have grown more slowly than in the previous three years.
Anecdotal observation supports the data:
“The spending power is less than before,” said Shawkat Imran, chef and part-owner of several Italian restaurants in Hong Kong. “Sometimes customers come, they share food. Some who used to drink a glass of wine now order a glass of water.”The number of customers hasn’t dropped, Mr. Imran said, but they are sharing dishes and spending 20% less per bill.
Official forecasts for Asia (excluding Japan) from the Asian Development Bank estimate that annual growth will drop to 6.6 percent this year, down from 7.2 percent in 2011, and lower than at any time since the global financial crisis. If exports continue to plummet, Asian consumers will have more to worry about than whether to drink water or wine.