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The COVID-19 crisis has driven down consumer confidence around
the world. But three critical dimensions of the crisis will shape confidence
in the months ahead: (1) increases in new cases and deaths due to the virus;
(2) the impact on jobs and household incomes; and (3) government policy to
mitigate its effects.
Experts at The Conference Board scored 21 countries along
these three dimensions to determine how fast consumer confidence would
rebound. China and South Korea, countries well past the first wave of cases,
successfully implemented strict containment policies and have begun to open
up their economies again; confidence there will likely rebound fairly
quickly. Elsewhere in Asia, Indonesia and India struggle to provide an
effective policy response and may recover more slowly, though cases have been
limited so far.
In Europe, there’s great diversity in the policy response:
Germany’s proactive containment measures, among the most robust in Europe,
may support a swift recovery. But in the UK, a delayed policy response may
result in greater job and income losses, leading to a longer period of low
confidence.
In the Gulf region and Canada, and to some extent in the US
and Mexico, the decline in oil prices adds to the pressure on consumer
confidence. The speed and dynamics of the recovery in consumer confidence
will vary, so companies should carefully monitor consumer behavior by region
and adapt.
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