Press Office

Auckland, 3 September 2008 - The latest MasterCard Worldwide Index™ of Retail has revealed that despite climbing mortgage rates and mounting food and fuel prices, New Zealand retail spending is forecast to grow 2.5% in the second half of 2008

“Retail spend in New Zealand is forecast to reach $19 billion over the next six months,” announced Stuart McKinlay, Country Manager New Zealand, MasterCard Worldwide today.

“This will be welcome news for a retail sector that has been bracing for a downturn. The 2.5% increase has been forecast despite the latest MasterCard Worldwide Index of Consumer Confidence reporting New Zealanders becoming increasingly pessimistic about their financial future.

“The data suggests that while New Zealanders may be feeling less confident in the economy as a whole, they are continuing to manage their retail spending appropriately,” added Mr McKinlay.

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 optimistic, 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.

Markets which remain more conservative but still show predicted growth include Taiwan, New Zealand and Japan, with a year on year growth expected to reach 2.9%, 2.5% and 1.0%, respectively.

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 optimistic, 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.

Markets which remain more conservative but still show predicted growth include Taiwan, New Zealand and Japan, with a year on year growth 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.

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 data , factoring in the secular trend of growth of the retail industry, and using the MasterCard Worldwide IndexTM of Consumer Confidence as an independent variable , 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 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.

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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 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.

• 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.

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