Australian consumers among the most financially insecure

Australian consumers are among the most financially insecure in the developed world, according to the Boston Consulting Group's (BCG) April global consumer sentiment survey.

Forty seven per cent of Australian respondents feel they are in financial trouble, up from 36 per cent one year ago. In addition, 22 per cent feel insecure about their current job over the next 12 months, five percentage points higher than their sentiment one year ago - this is on par with the level of job insecurity in France and only one percentage point behind levels in the United States.

This is consistent with Dun & Bradstreet's recent Consumer Credit Expectations Survey, which finds a significant proportion (35 per cent) of Australian households expecting difficulties managing their debt over the next three months, with this figure rising to 46 per cent for low-income households.

Management consulting firm BCG also finds that throughout the world, feelings of financial insecurity are rising and pessimism about the speed of economic recovery is rampant.

In the troubled Euro-zone, 41 per cent of Italian consumers, 36 per cent of British consumers and 27 per cent of Spanish consumers are financially insecure. Most also believe the economy will not improve, at least not for the next few years, with 46 percent of Italian consumers and over half of British and Spanish consumers falling into this category. Most are also worried about a potential job loss, in particular Italian and Spanish consumers.

The majority of respondents in the Euro-zone blame the government for the debt crisis, with 93 per cent of Greek consumers, unsurprisingly, citing that their government should take a 'big share' of responsibility for their debt situation. Fifty per cent of Spanish consumers and 44 per cent of Swiss consumers believe this to be so.

In contrast, Chinese consumers are much more optimistic about the economy. Only 16 per cent of people are financially insecure - significantly lower than those in many other developed countries - while 12 per cent are worried about job loss. About a third are pessimistic about the economy, and 26 per cent are anxious about the future.

When it comes to spending, the willingness to splurge on luxury items has plunged across the 16 countries surveyed. Locally, half of Australian consumers are planning to cut back on discretionary items.

Instead, values such as saving and health have become a priority, despite the Reserve Bank's decision earlier this month to cut interest rates by 50 basis points in an effort to boost consumer spending and economic recovery.

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