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Asian Consumer Confidence Appears on Upswing - 2003-12-01

Consumer confidence in many Asian countries appears to be on the upswing and a rating agency has upgraded Thailand's foreign currency bonds. Moody Investors Service has boosted its ranking for Thailand's long term foreign currency bonds two levels, from BAA-1 to BAA-3.

The rating agency says Thailand's external payments position has improved significantly since the Asia financial crisis of 1997. Moody's also says the country's vulnerability to economic downturns is greatly reduced. The upgrade came shortly after Thailand announced higher than expected economic growth estimates of 6.4 percent for 2003.

Forecasts for stronger than projected growth around the region are helping improve consumer confidence.

Researcher Richard Eardley from the firm A.C. Nielson says Hong Kong, where an outbreak of Severe Acute Respiratory Syndrome earlier this year brought on a short recession, is seeing a sharp rebound in consumer confidence. "The most optimistic countries are India, Thailand, Malaysia and Hong Kong… Hong Kong in previous survey seemed a bit down in the doldrums, but now we see that 67 percent think the economy will strengthen further," he says.

In contrast, South Korean citizens had very little enthusiasm about their country's economy - 80 percent of those polled believed the economy had worsened in the past six months. A labor dispute between the multinational food giant Nestle and South Korean workers is helping to sour the country's mood.

Seven representatives from a South Korean union recently flew to the company's Switzerland headquarters to stage an indefinite sit-in. The Geneva-based International Union of Food workers is backing the South Korean union members and is accusing the food giant of breaching international labor standards by refusing to negotiate.

Workers originally demanded a pledge for job security and promises of no more lay-offs back in June.

The dispute recently turned bitter after Nestlé's South Korean management hinted that the multinational might close its entire South Korean operation, which includes production and distribution centers.