War is on the minds of many consumers in Asia, possibly causing many to delay purchases due to increased unknowns from an anticipated war in Iraq. Both foreign and domestic investment has also slowed in most Asian equity markets this month.

Our Asian Consumer Prospects Index this month indicates a lowering of consumer demand growth prospects across the board, despite most countries being relatively geographically isolated from any conflict arenas.

Lack of any evidence of a recovery for European and North American economies is also pulling down the prospects of consumer demand growth in export-oriented economies in Asia.

[Extract] The dominant factors influencing the index this month are the increasing likelihood of military conflict in Iraq, and secondarily tensions emanating from North Korea. This has had an overall effect in damping prospects for consumer growth in almost all countries, but particularly to those closer to the anticipated arenas of conflict or those with larger proportions of Muslim citizens. A secondary factor is the continuing bad economic news from Europe and the US, affecting countries with a level of dependence on exports to the West. [End Extract]