Press Office

Auckland, 12 September 2007 - The latest MasterIndex™ of Retail projects New Zealand retail sales will reach NZ$18.5 billion in total sales value for the second half of 2007, an increase of 4.8 per cent year-on-year.

Conducted twice a year in June and December, the MasterCard survey sets the short-term forecast of retail sales growth for 12 key markets in the Asia/Pacific region.

“Continued growth in retail is projected across the region, though the source of growth varies greatly between markets. In New Zealand, strong retail sales are expected for the second half of the year, notwithstanding the increase in interest rates, due to the tight labour market driving wages up as well as the availability of credit in the market,” said Dr. Yuwa Hedrick-Wong, economic advisor, Asia/Pacific,MasterCard Worldwide.

The survey forecasts a real GDP growth of 1.7 per cent, as dairy export volumes grow and Kiwi farm incomes rise. This positive, yet moderate pace of growth however has been eclipsed by Australia with its real GDP growth of 3.5 per cent the strongest annual pace of growth in three years.

Australia is also expected to experience a boom in retail sales with a year-on-year growth of 6.2 per cent, reaching an estimated A$97.3 billion. Other markets due to experience sturdy growth include Indonesia, China, the Philippines, Malaysia and Hong Kong.

Despite prosperous retail sales figures, consumer confidence has dipped slightly in New Zealand. The latest findings in the MasterIndex of Consumer Confidence survey, MasterCard’s longest standing consumer sentiment survey, revealed a drop of 3.9 points to 57.1. Indicators that contributed to the small downward adjustment were the outlooks on employment, the economy, regular income and quality of life. The only indicator that recorded a gain was the outlook on the stock market.

The MasterIndex of Retail’s forecast for the second half of 2007 is shown in the table below.

The MasterIndex of Retail was launched in June 2003 by MasterCard as part of its knowledge leadership initiatives in Asia/Pacific. Combining 10 years of retail sales data¹, factoring in the secular trend of growth of the retail industry, and using the MasterIndex™ of Consumer Confidence as an independent variable², it 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 MasterIndex of Retail is among the MasterCard MasterIndex suite of research products; the others include:

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

The MasterIndex of Retail 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 done twice a year, in June and December, to provide powerful predictive market intelligence that is highly relevant not only to wholesale and retail industries, but to sectors such as entertainment, food and beverage, the hospitality and leisure industry, as well as consumer goods manufacturing.

The analytical foundation of the MasterIndex of Retail is based on the development of a set of techniques that have successfully linked the MasterCard MasterIndexTM of Consumer Confidence with retail sales statistics. The survey findings of the MasterIndex 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 MasterIndex of Retail forecast is one of the MasterCard MasterIndex suite of research products in Asia/Pacific. The other key MasterIndex research products include:

• The flagship MasterIndex™ of Consumer Confidence - the region’s most comprehensive and longest running consumer sentiment survey. Now in its 14th year, the MasterIndex 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.
• The MasterIndex™ 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 MasterIndex™ of Women's Advancement, which compares the socio-economic level of women to men in 13 markets 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 16 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 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, the company’s Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that it has filed with the SEC during 2007 and 2008, as well as reasons including difficulties, delays or the inability of the company to achieve its strategic initiatives set forth above. Factors other than those listed above could also cause the company’s results to differ materially from expected results.

(Full report is available at www.masterintelligence.com)

• The forecast growth in retail sales for Australia is 6.20% on the previous year, valued at A$97.3 billion for the second half of the year. Australia's first quarter real GDP grew by a stronger than expected 1.6 percent and we estimate 2007 real GDP growth at 3.5 percent, making this the strongest annual pace of growth in 3 years.
  The MasterIndex of Consumer Confidence for Australia surged by 23 points in this survey to 68.3, its highest level in 4 years. Significant gains were seen in the outlooks on employment, the economy, the stock market and on quality of life. The outlook on regular income also increased by 2.8 points to 74.5.
• China's retail sales are poised to expand by 12% year-on-year to reach an estimated 4476 billion Yuan in the second half of 2007. China's real GDP growth rose 11.1 percent year on year in the first quarter of 2007, and is expected to continue to grow at a more moderated pace of about 10 percent in 2007 as monetary tightening policies work their way through the economy.
  Consumer sentiments in China remain very optimistic. The MasterIndex of Consumer Confidence for China gained 2.8 points to 84.0 putting the Index at its highest level for China since 2003.
• Retail sales growth for Hong Kong is expected to be at 5.80% year-on-year, with total sales valued at an estimated HK$110.9 billion in the second half of 2007. With a favorable external environment and a monetary system that resisted the pressures of an appreciating renminbi, real GDP growth is estimated to remain strong at 4.8% in 2007.
  Slight decreases in all indicators contributed to a slight dip of 4.1 points in the MasterIndex of Consumer Confidence for Hong Kong. However, at the current level of 84.7, consumer sentiment is still very positive.
• Retail sales growth in Indonesia for the second half of 2007 is expected to see year-on-year growth of 16.0% to reach 236.4 trillion Rupiah. Indonesia's real economic growth is expected to be stronger in the subsequent quarters of the year as the effects of a strong external demand and domestic investment, a lower inflation rate and a declining interest rate ripple though the economy.
  However, in the absence of active government reforms to significantly boost investment, create jobs and diminish poverty, Indonesia’s economy should not expect accelerated or sustainable growth. The MasterIndex of Consumer Confidence for Indonesia shed 9 points to 53.5 in this survey. All indicators lost ground, with the outlook on the stock market posting the largest loss of 14.2 points to 56.9, followed by the outlook on quality of life (32.8) by 12.2 points.
  The forecasted growth in retail sales for Japan is 0.63% on the previous year, valued at ¥61.4 trillion for the second half of the year. Japan's real GDP is expected to grow by 1.9 percent in 2007, driven by an increase in net exports and business fixed investments which have continued to increase against the backdrop of high corporate profits and favorable business sentiment.
  The MasterIndex of Consumer Confidence for Japan fell slightly by 1.5 points to 66.8, spurred by a 7 point fall in the stock market outlook to the current level of 70.1. Outlook on the economy also dipped 5.4 points to 73.1, while outlook on quality of life dropped by 3.7 points to 54.1.
• Korea’s retail sales are expected to expand by 4.50% with a total value of $74.6 trillion won in the second half of the year. Real GDP growth is forecasted at 3.9% as export growth continues to demonstrate resilience in spite of the strengthening won. Real private consumption growth is forecasted at 3.6% in 2007, down from last year’s 4.1%.
  The MasterIndex of Consumer Confidence for Korea jumped by 19.2 points to 48.5 in this survey, nudging it closer to the 50 point neutrality mark as well as the market Historical Average of 52.2. Scores on all indicators saw an increase, with outlook on the economy showing the greatest jump, surging by over 150 percent (up 24.1 points to 39.9).
• Malaysia’s retail sales growth is expected to increase year-on-year by 6.85%, to reach an estimated RM40.8billion in the second half of the year. Real GDP growth for 2007 is forecasted at 5.7% with the services sector and construction industry expected to grow strongly.
  The MasterIndex of Consumer Confidence for Malaysia surged in this survey, gaining 33.5 points to finish at 71.0 in this survey, bringing the index closer to its previous high of 84.0 points in 2004.
• For the second half of 2007, retail sales for New Zealand are forecasted to grow by 4.80% year-on-year, reaching NZ$18.5 billion in total sales value. Real GDP growth for 2007 is expected to grow at 1.7% as dairy export volumes grow and farm incomes rise.
  The MasterIndex of Consumer Confidence for New Zealand dipped slightly by 3.9 points to 57.1 in this survey. This is only slightly below the market’s Historical Average of 58.8.
• The Philippines’ retail sales are estimated to grow by a healthy 13.7% in the second half of 2007. Total sales value is expected to reach 540.9 billion Pesos. Real private consumption is estimated to be at a healthy 5.9%, fueled by falling unemployment as well as the progressively increasing level of remittances from overseas Filipino workers.
  The MasterIndex of Consumer Confidence for the Philippines strengthened by 7.4 points to 64.6, the markets highest level in 8 years. All indicators were above the 50 point neutrality mark, with the outlook on regular income reaching the high confidence level of 94.5
• Retail sales growth for Singapore is forecasted to be at 3.60% year-on-year, with total sales valued at an estimated S$16.7 billion in the second half of the year. Financial services and construction fueled the growth momentum in the second quarter of the year and real GDP is expected to grow by 6.2% in 2007. Reasons contributing to the strong construction sector after years of stagflation include the commencement of the development of the multi-billion dollar integrated resorts, as well as hyperactivity in real estate.
  The MasterIndex of Consumer Confidence for Singapore in this survey increased marginally by 0.8 points to 83.3, the highest in seven years.
• Taiwan’s retail sales are forecasted to grow by 2.30% year-on-year. Total sales value over the second half of the year is estimated to reach NT$1638 billion. Real GDP growth in 2007 is forecasted at 3.0% with growth in the export of electronics and steel-related products being the driving force.
  The MasterIndex of Consumer Confidence for Taiwan posted a slightly stronger figure of 35.6 in this survey, up 4.8 points from the previous survey. All indicators edged upwards, with outlook on the stock market showing the biggest increase of 8.6 points to 53.3.
• Retail sales in Thailand are expected to expand by a modest 3.30% year-on-year, with sales value reaching an estimated 567.8 billion Baht during the second half of the year. Momentum for growth has been curtailed due to lower government spending, a softening external demand as well as a precarious political environment which is delaying local consumption of durable goods.
  The MasterIndex of Consumer Confidence for Thailand shed 28.4 points to 36.7 in this survey. The biggest drop was in the outlook on quality of life, dropping 37.9 points to 24.6.