Top 10 Countries Where Consumers Expect Their Income To Decrease In The Near Future

As long as the spread of the coronavirus continues to plague our lives people all over the world seem to be more and more pessimistic about their income considering that it will decrease in the near future.

According to McKinsey & Company global survey that it was published in April 2020, there are ten countries where consumers are really pessimistic believing that their income will decrease in the near future.

Brazil comes first in the rankings. 63% of respondents expect their income to decrease immediately while only 4% of the respondents to the survey expect an increase in their income in the near future. Second in the list comes South Africa where the same percentage of respondents as Brazil (63%) answered that they are waiting for a decrease in their income. In South Africa, 9% of respondents answered that they expect an increase in their income in the near future.

Closely follows India at the third place of the list. 55% of the respondents to the survey are pessimistic for the near future waiting for a decrease in their income. Only 18% of the respondents see the near future with optimism answering that they expect an increase in their income.

Italy and South Korea complete the top 5 countries where consumers feel really pessimistic about their income. In Italy, 51% of the respondents to the survey expect a decrease in their income and only 1% of the respondents expect an increase in their income in the near future. In South Korea, 48% of the consumers believe their income will shrink while the 1% of the respondents to the survey expect an increase in their income in the near future.

China comes in 6th place with 47% of the respondents expecting a decrease in their income in the near future. On the other hand, 25% of the respondents expect an increase in their income.

Spain is the 7th country on the list. 43% of the respondents expect a decrease in their income in the near future while 2% feel optimistic and expect an increase in their income. Closely follows Japan with 37% of the respondents to the survey claiming that their income will decrease in the near future. On the other hand, only 2% of the respondents expect an increase in their income in the near future.

France and the US come at 9th and 10th place of the list respectively. 34% of respondents in France expect a decrease in their income in the near future, while 3% of the respondents seem more optimistic expecting an increase in their income. In the US the 32% of the respondents expect a decrease in their income in the near future, while 10% of the respondents to the survey expect an increase in their income.

Chinese consumers’ optimism results in a net increase in expected future spending. This situation is also observed in Saudi Arabia, Indonesia, and Nigeria. Other countries, including Colombia, Chile, Brazil, Portugal, and Poland, have relatively low optimism but still expect to increase spending—potentially due to stocking-up behavior driven by stay-at-home orders.

Most European consumers (including those in Italy, Spain, France, and the United Kingdom), in addition to Korea and Japan, are less optimistic and, as a result, expect to spend less. While US consumers are more optimistic, they match European consumers’ reluctance to spend. In contrast, Canadian consumers are less optimistic and show the least willingness to spend among countries surveyed.

Top 10 countries where consumers are really pessimistic believing that their income will decrease in the near future

1. Brazil
2. South Africa
3. India
4. Italy
5. South Korea
6. China
7. Spain
8. Japan
9. France
10. United States

Globally, consumers are still spending (and sometimes spending more) on basics such as food, household supplies, and personal care items, as well as on home entertainment. As countries move through the contagion curve, we see increased momentum across select categories.

Consumers are dramatically pulling back on discretionary spending in most countries excepting China. Some of the categories showing the most precipitous declines include restaurants, apparel, footwear, jewelry, accessories, travel, and entertainment out of the home.

Consumers expect to spend more on basics such as groceries, household supplies, and in some countries personal-care items. Consumers are also trying new brands when the ones they are used to are unavailable. Bigger brands with more robust supply chains are growing faster as a result, giving them a unique opportunity to earn consumer trial and loyalty.

More than 75% of consumers globally expect the impact of COVID-19 on their routines and finances will be felt for more than two months, and about 50% expect the duration to be for more than four months. Even in China and India, where more than 50% of consumers are optimistic about the overall strength of their economies to rebound, about 90% expect it will be more than two months before routines go back to normal, and almost as many expect their finances to be impacted for a similar duration. In Germany, while 95% of consumers expect a lengthy impact on their routines, fewer (58%) expect this duration of impact on their finances. In contrast, almost 90% of consumers in Japan and South Korea expect disruptions to their finances to last more than two months. In the US the 52% of consumers expect the impact of COVID-19 on their routines and finances will be felt for more than four months.

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