CAN CONSUMERS SUPPORT WORLD ECONOMIC GROWTH IN 1993?
NEW YORK, Jan. 26 /PRNewswire/ -- American Express Bank said today that a research report released today by its Global Economics Unit showed that the consumer is ready to support economic recovery in the United States and Canada, but not yet in the United Kingdom or Japan. In its study of consumers' efforts to ease their debt burden, the Bank showed the German economy is not hampered by personal debt problems. The study reported on all Group 7 nations. The report provides a consumer checklist, covering 10 key indicators for each country, going beyond recent studies published by the OECD in Paris. "The report clearly demonstrates that world business growth depends on financially sound consumers whose spending ability is not constrained by excessive personal debt, said Richard O'Brien, chief economist of the Bank's Global Economics Unit. The report showed that a "Consumer Checklist" for each of the G7 countries reveals very different positions: -- The U.S. position looks much better than the U.K. The debt- servicing burden has improved and confidence has picked up sharply. However, the savings rate may still have to rise further to reduce debt to more satisfactory levels. -- The U.K.'s position is still precarious; on all indebtedness indicators the household's position is still worse than the 1980's average. Despite sharp cuts in interest rates, the interest burden is still above the 1980's average. -- Japan scores badly in terms of high debt, falling property prices, and weak confidence indicators which may more than outweigh the benefits of low interest rates. -- Germany is healthy in terms of debt, but interest rates are high, and poor confidence indicators cloud 1993's outlook. -- France also suffers from high interest rates, but looks weaker than Germany on property prices and cash liquidity. -- Italy is on shaky ground with respect to interest rates and macro-confidence indicators, although household debt is low. -- Canada is borderline-to-positive on virtually every indicator; scarcely a strong endorsement but overall a good score suggesting the ground is laid for a cautious growth of consumer activity. American Express Bank Ltd., a subsidiary of American Express Company (NYSE: AXP) meets the financial service needs of wealthy individuals and their companies and selected financial institutions through its four businesses: private banking, commercial banking, correspondent banking and global treasury. Established in 1919, the Bank today serves clients through a network of 72 locations in 39 countries. -0- 1/26/93 /CONTACT: Sarah Hewin, in London, 071-583-6666, Richard O'Brien or Simon Barker-Benfield, 212-298-3759, all of American Express Bank/ (AXP)
CO: American Express Bank ST: New York IN: FIN SU: ECO
LD-TM -- NY007 -- 8879 01/26/93 08:01 EST
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|Date:||Jan 26, 1993|
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