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Sydney, 8 September 2008 —Retail sales across Australia are predicted to grow 4.5 per cent, compared to the same time last year, for the second half of 2008 according to the MasterCard Worldwide Index of Retail.

Retail spend in Australia is expected to reach $104.5 billion over the next six months, despite a significant slump in consumer confidence. According to the MasterCard Worldwide Index of Consumer Confidence, Australians have become increasingly pessimistic about the future, with confidence dropping 22.1 points to 42.8 in this survey. The outlook on quality of life saw the biggest drop for Australia, down 28.1 points to 32.7.

“The economic slowdown has become a major concern for many Australians, yet despite rising petrol prices and the risk of further interest rate rises by the big four banks, retail spending remains strong,” says Eddie Grobler, executive vice president, Australasia, MasterCard Worldwide.

“This is indicative of the strong period of economic growth Australia has experienced over the last decade. Australians may be feeling less confident as they hear about a possible slow-down in the economy, but they continue to manage their retail spending appropriately,” he says.

Across Asia/Pacific, retail sales are predicted to continue their strong showing for the second half of 2008 despite growing concerns surrounding the international financial market unrest.

All 12 Asia/Pacific markets are expected to continue seeing positive growth in retail sales, with China taking the lead once again as it did in the same reporting period last year. Retail sales in China are estimated to reach 5566 billion Yuan, representing a sturdy 18.0% year-on-year growth. The outlook for Hong Kong continues to be bullish, with year-on-year growth predicted at 12.7%. Other markets with strong growth set against the backdrop of subdued economic outlook include Indonesia, Malaysia and Philippines, with year-on-year growth expected to reach 12.0%, 9.3% and 8.6% respectively.

On the other hand, markets which continue to remain less bullish as during the last reporting period include Taiwan, New Zealand and Japan, with a year-on-year growth still present but expected to reach 2.9%, 2.5% and 1.0%, respectively.

“In spite of the global slowdown and its impacts on Asia, employment and income remain relatively strong in the region; supporting consumer spending. The projected growth in retail sales needs to be put in perspective by taking account of the rise in inflation in most markets in Asia; which means that in real terms the projected growth is less robust than indicated,” observes Dr. Yuwa Hedrick-Wong, economic advisor, Asia/Pacific, MasterCard Worldwide.

Conducted twice a year in June and December, the MasterCard Worldwide Index of Retail was launched in June 2003 by MasterCard as part of the company's commitment to providing research and insight for the wider business community in Asia/Pacific. Combining 10 years of retail sales data¹, factoring in the secular trend of growth of the retail industry, and using the MasterCard Worldwide Index™ of Consumer Confidence as an independent variable², the Index provides six-month forecasts of retail sales growth in 12 markets: Australia, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan and Thailand.

The MasterCard Worldwide Index of Retail’s forecast for the second half of 2008 is shown in the table on the following page.

• The flagship MasterCard Worldwide Index™ of Consumer Confidence - the region’s most comprehensive and longest running consumer sentiment survey
• The MasterCard Worldwide Index™ of Travel, which combines outbound travel forecasts for the region with a survey of Asian travelers’ lifestyle trends
• The MasterCard Worldwide Index™ of Women's Advancement, which compares the socio-economic level of women to men.

NOTE TO EDITORS: The full report, as well as the MasterCard Worldwide Index™ of Consumer Confidence, can be found at the website www.masterintelligence.com. A summary of the individual market forecasts is found at the end of this release.

The MasterCard Worldwide Index of Retail1 is a short-term forecast of retail sales growth in 12 key Asia/Pacific markets – Australia, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan and Thailand. The forecasting is conducted twice a year, in June and December, providing powerful predictive market intelligence that is highly relevant not only to wholesale and retail industries, but also to sectors such as entertainment, food and beverage, the hospitality and leisure industry, as well as consumer goods manufacturing.

The analytical foundation of the MasterCard Worldwide Index of Retail is based on the development of a set of techniques that have successfully linked the MasterCard Worldwide Index of Consumer Confidence with retail sales statistics. The survey findings of the MasterCard Worldwide Index of Consumer Confidence are used as a leading indicator of how consumers may act in terms of retail spending over the six-month period ahead. Thus, a link is made between consumer sentiment and actual consumer behavior.

The MasterCard Worldwide Index of Retail forecast is one of the MasterCard Worldwide Index suites of research products in Asia/Pacific. The other key MasterCard Worldwide Index research products include:

• The flagship MasterCard Worldwide Index™ of Consumer Confidence - the region’s most comprehensive and longest running consumer sentiment survey. Now in its 15th year, the MasterCard Worldwide Index of Consumer Confidence has demonstrated its predictive precision and has proved to be an excellent barometer of the consumer pulse in this region. Today, the survey is much sought after by analysts, academics and decision-makers in financial institutions, government agencies and multinational organizations.
• MasterCard Worldwide Index™ of Travel encompasses a six month forecast of outbound travel for 12 markets (Australia, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Taiwan and Thailand) and a survey of business and personal travel trends among the urban middle class across the region.
• The MasterCard Worldwide Index™ of Women's Advancement, which compares the socio-economic level of women to men in 13 markets (including Vietnam) using four key indicators: participation in the labor force, tertiary education, managerial positions and above median income.

MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes over 18 billion transactions each year, and provides industry-leading analysis and consulting services to financial institution customers and merchants. Through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard serves consumers and businesses in more than 210 countries and territories. For more information go to http://www.mastercard.com.

Statements in this press release which are not historical facts, including any statements about MasterCard's plans, strategies, beliefs and expectations, are forward-looking and subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements speak only as of the date they are made. Accordingly, except for the company's ongoing obligations under the U.S. federal securities laws, the company does not intend to update or otherwise revise the forward-looking information to reflect actual results of operations, changes in financial condition, changes in estimates, expectations or assumptions, changes in general economic or industry conditions or other circumstances arising and/or existing since the preparation of this press release or to reflect the occurrence of any unanticipated events. Actual results may differ materially from such forward-looking statements for a number of reasons, including those set forth in the company's filings with the Securities and Exchange Commission (SEC), including the company's Annual Report on Form 10-K for the year ended December 31, 2006 and Current Reports on Form 8-K that it has filed with the SEC during 2007, as well as reasons including difficulties, delays or the inability of the company to achieve its strategic initiatives. Factors other than those listed above could also cause the company's results to differ materially from expected results.

(Full report available at www.masterintelligence.com)

• The forecast growth in retail sales for Australia is 4.50% on the previous year, valued at AUS$104.5 billion for the second half of 2008. This is against the backdrop of an expected deceleration of real GDP growth to 3.2% this year and increasing inflationary pressures fueled by robust domestic spending and sturdy economic growth over the last 15 years.
  
  The MasterCard Worldwide Index of Consumer Confidence for Australia dipped 22.1 points to 42.8 in this survey. With the exception of the outlook on regular income, all other indicators fell to below the optimistic threshold. The outlook on quality of life saw the biggest drop for Australia, down 28.1 points to 32.7.
• China's retail sales are poised to expand by 18.00% year on year to reach an estimated 5566 billion Yuan in the second half of 2008, recording the highest year on year growth rate among all markets included in the survey. China’s real GDP growth is expected to moderate to 9.3% and its real economy to slowdown this year after hitting a 13-year high and 5th consecutive year of double-digit expansion in 2007. The expected vulnerability in economic growth can be largely attributed to a downturn in exports growth and a weaker investment growth.
  
  Consumer sentiments in China continue to remain rather optimistic, with the MasterCard Worldwide Index of Consumer Confidence for China decreasing slightly by 2.8 points to 82.7. With the exception of the outlook on employment, all other indicators posted nominal decreases.
• The retail sales growth figure for Hong Kong is expected to be at 12.70% year on year, with total sales valued at an estimated HK$136.8 billion in the second half of this year. Despite a buoyant labor market, improved household financial positions, lower interest rates and a sturdy influx of tourists, Hong Kong’s real economy is expected to slowdown in 2008. The market’s real GDP growth is also estimated to dip 2.0% from the previous year.
  
  The MasterCard Worldwide Index of Consumer Confidence for Hong Kong edged slightly lower, shedding 2.9 points to 83.1. In line with an expected higher inflation rate, softer domestic demand and weaker economic performance, all indicators (with the exception of the outlook on the stock market) nudged lower.
• Retail sales growth in Indonesia for the second half of 2008 is expected to see year on year growth of 12.00% to reach 276.8 trillion Rupiah. Having reached a 10-year high of 6.3% last year, Indonesia’s real economy is expected to slowdown through 2008 with real GDP dipping to 5.0%. Domestic demand however is likely to remain as the key economic growth driver for Indonesia.
  
  The MasterCard Worldwide Index of Consumer Confidence for Indonesia shed 21.1 points to 36.7. All indicators lost ground, with the outlook on quality of life posting the largest loss of 34.7 points to 17.3.
• The forecasted growth in retail sales for Japan is 1.00% on the previous year, valued at ¥61.8 trillion for the second half of this year. Japan's real GDP growth rate is estimated at 1.4% for 2008, shedding 0.4% from the growth rate of the previous year. It is expected that rising food, energy and commodity prices will keep inflation pressures high in Japan through 2008 with consumer prices growth expected to average 0.6%, up 0.3% against the previous year.
  
  The MasterCard Worldwide Index of Consumer Confidence for Japan saw a significant drop to 29.0 points, pulling the index down to below the 50 neutrality mark. In view of the lackluster economic conditions, all indicators saw a noticeable dip, with the outlook on the stock market posting the largest drop of 26.4 points to 32.1. The outlook on quality of life was however the weakest indicator, shedding 12.9 points to 19.5.
• Korea’s retail sales are expected to expand by 5.30% with a total value of 125.0 trillion Won in the second half of 2008. Real GDP growth is projected to come in at 4.2% in 2008 on the back of a downturn in exports growth and domestic demand.
  
  The MasterCard Worldwide Index of Consumer Confidence for Korea declined significantly by 36.4 points (57%) to 27.7, well below the optimistic threshold. Significant decreases in the indicators were across the board - Regular Income (down 27.8 points to 45.9), Stock Market (down 17.9 points to 48.7), Employment (down 32.0 points to 16.4), Quality of Life (down 52.7 points to 15.8) and Economy (down 51.9 points to 11.7).
• Malaysia’s retail sales growth is expected to increase year on year by 9.30%, to reach an estimated RM49.3 billion in the second half of 2008. While Malaysia records a softer real GDP growth at 4.0% this year, weaker export markets and economic slowdown in key industrial countries and Asia will place domestic demand as the mainstay of economic growth. Additionally, it is likely that the recent drastic price hikes in gasoline pump and diesel prices are set to send the prices of food, transportation and other essentials even higher across the board in the coming months. As such, consumer prices growth in Malaysia is expected to hit a 10-year high of 5% for 2008.
  
  In line with the overall subdued economic outlook, the MasterCard Worldwide Index of Consumer Confidence for Malaysia declined significantly to below the 50 neutrality mark, shedding 35.6 points to 36.9. All indicators were below the optimistic threshold, with the outlook on quality of life posting the steepest fall of almost 60%.
• For the second half of 2008, retail sales for New Zealand are forecasted to grow by 2.50% year on year, reaching NZ$19.0 billion in total sales value. While a slowdown is expected in real GDP growth for 2008 to an estimated 2.0% this year, the key source of economic growth will stem from exports growth of about 2.9%, up 3% from the previous year.
  
  This is set against the backdrop of the results of the recent MasterCard Worldwide Index of Consumer Confidence for New Zealand which dropped 19.3 points to 37.1 points, bringing the index to its lowest level since the second quarter of 1998.
• The Philippines’ retail sales are estimated to grow by a healthy 8.60% in the second half of 2008. Total sales value is expected to reach 592.3 billion Pesos. Real GDP growth is expected to ease to 5.0% as result of escalated inflationary pressures, weaker domestic demand and a downturn in exports growth and investment. Looking ahead, the growth momentum of the market’s real GDP will depend critically on the ability of the government to stimulate the economy through increased infrastructure investment in transportation, power and water projects, as well as higher social spending to address the country’s persistent poverty problem.
  
  The MasterCard Worldwide Index of Consumer Confidence for the Philippines weakened 24.5 points to 43.2. All indicators declined, with the outlooks on employment and the stock market posting the biggest drops of 28.8 points to 28.7 and 36.3 points to 38.1, respectively.
• Retail sales growth for Singapore is forecasted to be at 5.20% year on year, with total sales valued at an estimated S$17.4 billion in the second half of the year. Singapore is expected to post a lower but still healthy real GDP growth rate of 5.0%, down 2.7% from 2007. Softer global demand for electronics and pharmaceuticals and weaker performance of the manufacturing industry are expected to be the key underlying factor leading to the moderation in Singapore's economic activities in 2008. The main source of growth however is expected to stem from domestic spending.
  
  The MasterCard Worldwide Index of Consumer Confidence for Singapore in this survey gained 3.7 points to 87.3, recording the highest score in eight years of this survey series and the highest among all markets included in the survey.
• Taiwan’s retail sales are forecasted to grow by 2.90% year on year. Total sales value over the second half of 2008 is estimated to reach NT$1729 billion. Real GDP growth is expected to moderate through 2008 to 3.4%, down 2.3% from the previous year, with the absence of major drivers stimulating investment and consumption being the key reasons underlying the economic slowdown.
  
  The MasterCard Worldwide Index of Consumer Confidence for Taiwan (71.3) improved significantly in optimism to reach the highest level recorded since the second quarter of 1993.
• Retail sales in Thailand are expected to expand by a modest 3.90% year on year, with sales value reaching an estimated 600.0 billion Baht during the second half of the year. It is also expected that higher global fuel prices as well as food, commodity and cooking gas prices will cause inflationary pressures to gather speed through 2008. Having reached 3.3% in May, consumer prices are also likely to grow by 3.5% for the year.
  
  The MasterCard Worldwide Index of Consumer Confidence for Thailand shed 20.5 points (46%) to 23.7 in this survey. Underpinned by softer economic growth, rising inflation, sluggish labor market conditions and weaker exports growth, all indicators took a decline.