People around the world want governments to spend more to help economies survive the coronavirus as they ponder a bleak outlook for their own finances in the coming year.
That’s according to a global survey carried out by YouGov that casts doubt on the prospects for a consumer-driven recovery in 2021. The poll of more than 22,000 people signals that households will cut back spending on entertainment, clothing and food next year, anticipating higher living costs and lower incomes.
With that backdrop of gloom, the results suggest consumers aren’t yet fretting at the spiraling costs of a crisis that could require even more fiscal expansion in 2021. Governments across the world have already taken on hundreds of billions of dollars in debt to contain the economic impact of the virus.
The survey, carried out between November 13 and December 1, shows clear backing for such borrowing. Respondents in 12 out of 15 countries were in favor of boosting debt to help bolster fiscal spending. Only citizens in Poland and in Mexico were against increasing debt.
Overall, 50 per cent backed the approached, compared with 31 per cent who preferred keeping national debts under control. In the UK, where a political debate is already under way about the need to curb borrowing, the margin was even higher – at 57 per cent to 25 per cent.
That preference for government largesse reflects people’s worries about their own finances. When presented with an unexpected windfall equivalent to a month’s income, just 14 per cent said they would spend it, while 59 per cent said they would save it or repay debts. Among Group of Seven nations, those in the U.S. were less willing to splash out. The lowest result was in Mexico, where just 3 per cent said they would spend it.
Globally, consumers seem prepared to tighten their belts even further, with only 18 per cent of people saying they didn’t expect to trim spending next year. Entertainment and clothing are the areas most at risk, with housing costs and pensions the items least likely to see a reduction.
That probable belt tightening reflects a bleak view of consumers’ financial outlooks. Two thirds of respondents expect living costs to increase as a result of the crisis, while people are almost four times more likely to say it has reduced their household income rather than increased it.