WIN CRISIS INDEX 2 nd Wave of the

WIN CRISIS INDEX 2 nd Wave of the Worldwide Barometer of the Financial Crisis April 2009

Top Five Things to Remember: 1. The global perception on the economic situation has plateaued. 2. Even though optimism has increased in 10 of the 25 surveyed countries, economic prospects still remain negative in 20 of the 25 surveyed countries. 3. Economic perspectives in the BRIC and Arab countries remain more positive than in the G 8 countries 4. Level of trust in the governments’ ability to manage the financial situation, and in the stability and solidity of the banks and stock market has decreased. 5. The clothing/footwear/accessories, entertainment/restaurant/cinema, major household purchases, holiday/travel and grocery expenses are the sectors mostly affected by the economic crisis. WIN – a group bringing together the largest independent polling firms in the world – has conducted the most extensive survey on the economic crisis with 20, 325 representative citizens in 25 countries.

Context and Methodology • WIN conducted the second wave of the WIN Crisis Index interviewing 20, 325 respondents in 25 countries from mid February to the end of March. The objective of the survey is to evaluate the respondents’ perception of the financial crisis in their countries. The WIN Crisis Index is conducted every 3 months. The countries of the G 8: Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States, included in the 25 countries surveyed, are also included in each table. The same has been done for the countries known as BRIC: Brazil, Russia, India and China. • The table below presents a summary of the methodology used in each country to conduct this survey: 3 • Each sample is representative of its country’s population in terms of socio-demographic variables. Sample sizes ensure accurate generalizations to the total population and allow a very precise interpretation of the results. Contrary to what can be expected, age and gender do not seem to have an impact on the respondent’s perception of the financial crisis.

Financial Forecasts In the next 3 months, do you believe the economic situation in your country will be better, remain the same, or be worse? • As expected, the overall financial outlook is negative with only 16% of respondents who believe the economic situation in their country will be better in the next 3 months. • Qatar, Kuwait, Brazil, Saudi Arabia and the United Arab Emirates are the only countries where a higher percentage of respondents felt the economic situation would improve rather than worsen. • Pessimism is highest in the United Kingdom (67%), France (63%), Spain (61%) and Germany (61%). • While citizens in the countries forming BRIC are divided in their opinions, citizens of the G 8 countries have a negative outlook with 55% who believe the financial situation will worsen and only 8% who believe it will improve. 4

Financial Forecasts Three Months ago and Today In the next 3 months, do you believe the economic situation in your country will be better, remain the same, or be worse? January 09’ March 09’ • Overall, in the past three months the overall outlook on the economic situation throughout the surveyed countries has remained the same. • India and Spain are the countries where the number of citizens with a negative outlook on the economic situation has increased the most. In fact, in India, , a third (33%) of the respondents now feel the situation will worsen compared to 14% last January. • It is important to note that countries showing the largest decrease of respondents with a negative view, such as Korea, the United Kingdom, Iceland, Japan, and Canada, are not more optimistic but rather more likely to believe it will remain the same. • Interestingly, even if the BRIC countries, are noticeably more positive than the overall population, their confidence has decreased compared to three months ago, with 5% more respondents feeling the economic situation will now worsen. 5 * Argentina, Australia, Kuwait, Lebanon, Mexico, Qatar, Saudi Arabia and UAE did not participate in the First wave and are not included from the March average.

Income Expectations Over the next 12 months, do you expect your family income to increase, remain the same, or decrease? • Close to half (45%) of the total respondents believe their income will remain the same, 25% believe it will increase, while only 24% believe their income will decrease, which can be viewed as optimistic in a time of financial crisis. • Surprisingly, while the financial crisis started in the USA, 35% of its respondents believe their income will increase and only 20% believe it will decrease. • Pessimism is highest in Iceland, Japan and Russia, whereby 55%, 49% and 43% respectively believed their income will decrease over the next year. • While countries in the BRIC have a rather optimistic outlook, with 34% of respondents feeling their income will increase over the next year, the respondents in the G 8 countries are rather pessimistic about their income expectations for the next year with only 20% of citizens feeling it will increase. 6

Income Expectations Three Months ago and Today Over the next 12 months, do you expect your family income to increase, remain the same, or January 09’ March 09’ decrease? • Overall, compared to three months ago, more of the respondents believe their income will decrease over the next year. • China (15%) and Russia (15%) are the countries where pessimism on family income has the largest increase. • On the other hand, in Korea (-25%) and the United Kingdom (-6%), less citizens believe their income will decrease than three months ago. • It is interesting to note that although only 25% of the citizens in the BRIC countries feel their income will decrease as of now, it is still 9% more than three months ago. 7 * Argentina, Australia, Kuwait, Lebanon, Mexico, Qatar, Saudi Arabia UAE did not participate in the First wave and are not included from the March average.

The Real Estate Market In general, do you believe it is a good or bad time to buy a house? • Overall, 41% of respondents from the surveyed countries do not believe it is a good time to buy a house. • Pessimism is highest for the respondents in Argentina(77%), the Netherlands (65%), Italy (63%), Mexico (63%), Lebanon (62%) and Brazil (60%). • Australia is the only country where more than half (54%) believe it is a good time to buy a house. • Citizens in the G 8 countries are fairly divided with only 31% of respondents who believe it is not a good time to buy a house, but 27% who believe it is. 8

The Real Estate Market Three Months ago and Today In general, do you believe it is a good or bad time to buy a house? January 09’ March 09’ • Surprisingly, compared to the change in the financial outlook and income expectations of citizens between now and three months ago, overall, more respondents now feel it is a good time to buy a house with a 2% increase (25% to 27%) and fewer who believe it is a bad time to do so (4%). • India and Brazil are the only countries where there is a significant difference in the number of respondents who feel it is a bad time to buy a house compared to three months ago with an increase of 18% and 5% respectively. • On the other hand, countries that are pessimistic throughout the survey such as the United Kingdom, Iceland, France, Korea and Canada show an important percentage decrease of respondents who feel it is a bad time to buy a house with a drop of 19%, 14%, 10%, 9%, and 7% respectively. • Interestingly, while more citizens in the BRIC countries feel it is not a good time to buy a house now compared to three months ago, less respondents in the G 8 (-6%)feel this way. 9 * Argentina, Australia, Kuwait, Lebanon, Mexico, Qatar, Saudi Arabia UAE did not participate in the First wave and are not included from the March average.

Trusting the Government What is your level of trust in the government to manage the financial situation? January 09’ March 09’ • On average, respondents expressed a lower level of trust (4. 8) in their government’s ability to manage the financial crisis than they did three months ago (5. 2). • Austria, Iceland Germany, are the only countries not showing a lower level of trust in their government to manage the financial situation compared to three months ago. • Respondents from China (6. 7), Brazil (6. 4), the Netherlands (6. 2) and India (5. 5), 3 of the 4 BRIC countries, expressed higher levels of trust in their government to manage the financial situation. • Conversely, of the 25 surveyed countries, Japan (2. 9) remains the country expressing the lowest level of trust in its government’s ability to manage the financial situation. • It is interesting to note that respondents from the USA expressed a much higher level of trust in their government to manage the financial situation three months ago (6. 3) prior to the presidential inauguration, than they do now (4. 8). 10 * Argentina, Australia, Kuwait, Lebanon, Mexico, Qatar, Saudi Arabia UAE did not participate in the First wave and are not included from the March average.

Stability of the Banks What is your level of trust in the stability / solidity of the banks? January 09’ March 09’ • On average, respondents’ level of trust in the stability and solidity of the banks has decreased (5. 1) compared to three months ago (5. 3). • With the exception of India, China, the Netherlands, Iceland Germany, respondents from all the surveyed countries expressed lower levels of trust in the stability of their banks compared to three months ago. • Similarly to three months ago, respondents from India (6. 6), China (6. 6), the Netherlands (6. 4) and Canada (6. 1) expressed a high level of trust in the stability / solidity of their banks, while respondents from Russia (4. 4), Germany (4. 3) and the United Kingdom (3. 3) voiced low levels of trust. • Interestingly, in comparison to other BRIC countries, respondents from Russia remain those who have a much lower average score (4. 4) (BRIC averaging 5. 9 together). 11 * Argentina, Australia, Kuwait, Lebanon, Mexico, Qatar, Saudi Arabia UAE did not participate in the First wave and are not included from the March average.

Stability of the Stock Market What is your level of trust in the stability / solidity of the stock market? January 09’ March 09’ • Overall, similarly to the level of trust in their government’s ability to manage the financial situation and the stability of the banks, respondents’ level of trust in the stability / solidity of the stock market decreased with a low score of 3. 7. • The respondents from only four countries: Austria, Germany, Italy and China expressed higher levels of trust in the stability / solidity of the stock market then they did three months ago. • On the other hand, the respondents in the United Kingdom expressed a much lower level of trust in the stability / solidity of the stock market with a low score of 2. 7. 12 * Argentina, Australia, Kuwait, Lebanon, Mexico, Qatar, Saudi Arabia UAE did not participate in the First wave and are not included from the March average.

Total Cut Backs Since the beginning of the Economic Crisis, have you cut back expenses on: • As expected, respondents throughout the 25 surveyed countries have made significant cutbacks in each of the ten categories surveyed. • The industry that seems to be the least affected by the financial situation is the IT and Telecom sector as can be seen from the relatively lower percentages, though still significant, in the mobile phone, home internet connection and television provider expense categories. • On the other hand, cutbacks were extremely high in all other categories with the greatest impact on clothing / footwear / accessories expenses. • It is interesting to note that while * Korea and the Netherlands did not participate in the question on expense cutbacks and are not included from the Americans remain rather optimistic in March average. their outlook on the financial crisis, they have considerably cut back in each expense categories. • The pessimism observed throughout this study is largely reflected in the major cutbacks made in all categories for all 25 countries surveyed. 13

Cutbacks in Argentina Since the beginning of the Economic Crisis, have you cut back expenses or have you not cut back expenses in the following categories: • Based on the ten categories offered in the survey, on average, 53% citizens in Argentina cut back on their expenses. • Furthermore, compared to the averages for all respondents surveyed in each category, Argentina had higher averages of respondents who cut back and lower averages who did not. • Argentineans cut back the most on clothing / footwear / accessories and groceries (72% for both categories). • Argentineans cut back the least in categories of home internet connection (23%) and television (24%). However, both these percentages remain high compared to the other countries in this survey. 14

Cutbacks in Australia Since the beginning of the Economic Crisis, have you cut back expenses or have you not cut back expenses in the following categories: • Overall, more than 50% of Australians made cutbacks in four of the ten categories. • Australians cut back least on their television provider and home internet connection expenses, with only 10% and 11% of respondents who did respectively. • On the other hand, Australians reduced their expenses the most in the category of clothing / footwear / accessories (58%). 15

Cutbacks in Austria Since the beginning of the Economic Crisis, have you cut back expenses or have you not cut back expenses in the following categories: • On average, Austrians made fewer cutbacks compared to all surveyed respondents combined. • In fact, average cutbacks are low in each category compared to the results for other countries. • Unlike other surveyed countries, Austrians made the most cutbacks on grocery expenses (40%). • Respondents in Austria also made cutbacks on clothing / footwear / accessories (37%) and entertainment expenses (37%). 16

Cutbacks in Brazil Since the beginning of the Economic Crisis, have you cut back expenses or have you not cut back expenses in the following categories: • Reflecting their optimism throughout the survey, Brazilians made fewer cutbacks in the expense categories offered in the survey. • Brazilians mostly cut back in two categories: clothing / footwear / accessories (45%) and major home purchases with (45%). • It is important to note that these ten expense categories do not apply to a high percentage of respondents in Brazil. Furthermore, this is true for the two areas where citizens cut back the least: television expenses (10%) and home internet connection expenses (12%). 17

Cutbacks in Canada Since the beginning of the Economic Crisis, have you cut back expenses or have you not cut back expenses in the following categories: • On average 32% of Canadian respondents made cutbacks in the 10 expense categories offered in the survey. • However, the average percentage of Canadians who have cut back on their expenses was lower compared to other countries except one category. • 54% of Canadians cut back the most on entertainment expenses. • Other areas where Canadians have made the most spending reductions are clothing / footwear / accessories (47%), holiday / travel (42%) and buying major household appliances (42%). • On the other hand, only 8% of Canadians cut back on their home internet connection. Also, only 13% of Canadians cut back on television expenses. 18

Cutbacks in China Since the beginning of the Economic Crisis, have you cut back expenses or have you not cut back expenses in the following categories: • Overall, the Chinese made fewer cutbacks than the respondents in other surveyed countries • 51% of respondents made most of their cutbacks in the holiday / travel category. • The Chinese reduced their spending the least in the categories of television provider (13%) and home internet connection (18%). • It is interesting to note that most countries tended not to cut back on their home internet connection, however in China, similarly to India, respondents claimed they cut back the least on their television expenses (13%). 19

Cutbacks in France Since the beginning of the Economic Crisis, have you cut back expenses or have you not cut back expenses in the following categories: • Over half of the citizens of France cut back in 6 of the 10 categories. • Furthermore, France had higher averages of respondents who cut back compared to all countries surveyed. • The French cut back the most on clothing / footwear / accessories ( 63%) and entertainment expenses (61%). • On the other hand, only 14% of respondents cut back on their home internet connection expenses. 20

Cutbacks in Germany Since the beginning of the Economic Crisis, have you cut back expenses or have you not cut back expenses in the following categories: • Based on the 10 categories in our survey, fewer Germans cut back their expenses compared to the other countries in this survey. • The two categories where expenses were reduced the most were for entertainment (46%) and clothing / footwear / accessories (45%). • Similarly to other countries, only 13% of German respondents cut back on their home internet connection. 21

Cutbacks in Iceland Since the beginning of the Economic Crisis, have you cut back expenses or have you not cut back expenses in the following categories: • On average, more citizens of Iceland cut back (49%) than did not (41%) in the ten expense categories offered in this survey. • In seven of the 10 categories, respondents in Iceland made more cutbacks on their expenses than the average of all respondents surveyed in the 25 countries. • Expenses were reduced the most for holiday / travel (72%), buying major home appliances (72%), and clothing / footwear / accessories and for groceries (71%). • Respondents in Iceland made the least cutbacks on their home internet connection (8%). 22

Cutbacks in India Since the beginning of the Economic Crisis, have you cut back expenses or have you not cut back expenses in the following categories: • Overall, based on the expense categories offered in this survey, Indians are rather divided on their cutbacks. • The areas where Indians made the most cutbacks are on entertainment and holiday / travel expenses (53% and 50% respectively). • On the other hand, only 11% of respondents reduced their home internet connection expenses. However, it should be noted that almost half (44%) of Indians responded that this expense category did not apply to them. 23

Cutbacks in Italy Since the beginning of the Economic Crisis, have you cut back expenses or have you not cut back expenses in the following categories: • On average, Italians are fairly divided on whether they have cut back or not in the categories offered in this survey. • The area where Italians reduced their spending the most is for clothing / footwear / accessories (70%). • It is interesting to note that although home internet connection (20%) is one of the two areas (home improvement / repairs being the other one) where Italians made the fewest cutbacks, the number of Italians who did cut back in this category is significantly higher than in other countries. • In addition, it must be taken into consideration that many categories do no apply to Italians, especially for expenses related to their television provider (51%). 24

Cutbacks in Japan Since the beginning of the Economic Crisis, have you cut back expenses or have you not cut back expenses in the following categories: • In general, the Japanese cut back more on their expenses compared to all surveyed countries. • The category where the most spending reductions were made is for clothing / footwear / accessories with a high of 70%. • Similarly to the other surveyed countries, citizens in Japan made the fewest cutbacks on home internet connection expenses with only 13% who did and 82% of respondents who did not. • On the other hand, only 13% made cutbacks on their television expenses. However, it is important to note that 40% of Japanese citizens responded that this expense did not apply to them. 25

Cutbacks in Kuwait Since the beginning of the Economic Crisis, have you cut back expenses or have you not cut back expenses in the following categories: • Based on this survey, fewer cutbacks were made by citizens in Kuwait than in other surveyed countries. • Only 9% of respondents cut back on their home internet connection expenses. • Contrary to the trend seen in other countries but similarly to the citizens of Qatar and the United Arab Emirates, Kuwait made the most cutbacks on major household purchases (50%). 26

Cutbacks in Lebanon Since the beginning of the Economic Crisis, have you cut back expenses or have you not cut back expenses in the following categories: • On average, respondents in Lebanon made fewer cutbacks than the respondents in the other surveyed countries. • In fact, average cutbacks are relatively low in each category compared to the results for other countries. • Only 9% of respondents cut back on their home television provider expenses. • We should note that while a majority of surveyed countries cut back less on home internet connection expenses, this category does not apply to 41% of the respondents in Lebanon. 27

Cutbacks in Mexico Since the beginning of the Economic Crisis, have you cut back expenses or have you not cut back expenses in the following categories: • On average, 55% of respondents in Mexico cut back on their expenses in the ten spending categories offered in this survey. • Furthermore, average cutbacks in Mexico are high in each category compared to the results for other countries • The areas where the most expense reductions were made are in clothing / footwear / accessories and for groceries (73% and 74% respectively). • The two categories where Mexicans made the fewest cutbacks are for home internet connection (26%) and television provider (31%) expenses. However, not only are the percentages high compared to other countries but it is also important to note that an equally high percentage of respondents replied that these expenses did not apply to them. 28

Cutbacks in Qatar Since the beginning of the Economic Crisis, have you cut back expenses or have you not cut back expenses in the following categories: • Of all the surveyed countries, Qatar is the country that cut back the least. • In fact, fewer than 1/3 of respondents have cut back in any of the ten categories. Furthermore, more than half of respondents did not make cutbacks in any of the expense categories. • Similarly to Kuwait and the United Arab Emirates, household purchases were most affected by the economic crisis for citizens of Qatar with 32% of respondents who made cutbacks in this category. 29

Cutbacks in Russia Since the beginning of the Economic Crisis, have you cut back expenses or have you not cut back expenses in the following categories: • Compared to the other surveyed countries, Russia had the highest percentage of respondents for whom these expense categories did not apply. • Though Russians cut back the least on television expenses (9%), 53% felt this expense did not apply to them. • 61% of Russians made most of their cutbacks on clothing / footwear / accessories expenses. 30

Cutbacks in Saudi Arabia Since the beginning of the Economic Crisis, have you cut back expenses or have you not cut back expenses in the following categories: • On average, 31% of citizens in Saudi Arabia cut back their expenses. • The two expense areas that were most affected by the economic crisis in Saudi Arabia were major household purchases (43%) and holiday / travel (45%). • On the other hand, only 15% of respondents in Saudi Arabia made cutbacks on television expenses. However, 45% responded that this category does not apply to them. 31

Cutbacks in Spain Since the beginning of the Economic Crisis, have you cut back expenses or have you not cut back expenses in the following categories: • Respondents in Spain were rather divided on whether they cut back their expenses or not based on these categories. • 59% of Spaniards made cutbacks on clothing / footwear / accessories with that did. • For the citizens of Spain, the category where they reduced their spending the least is on their home internet connection (11%). • Overall, the percentage of respondents for whom these categories did not apply is high compared to the other countries surveyed. 32

Cutback in Switzerland Since the beginning of the Economic Crisis, have you cut back expenses or have you not cut back expenses in the following categories: • On average, Swiss citizens made fewer cutbacks compared to the other surveyed countries. • Furthermore, the percentage of respondents who did cut back is lower than the average percentage of the total surveyed for all but one category. • Furthermore, less than a third of the citizens in Switzerland reduced their expenses in all categories. • The fewest cutbacks were made on home internet connection and television provider expenses with only 4% and 3% respectively who reduced their spending. 33

Cutbacks in the UAE Since the beginning of the Economic Crisis, have you cut back expenses or have you not cut back expenses in the following categories: • Overall, respondents in the UAE made fewer cutbacks than respondents in the other surveyed countries. • As in Kuwait and Qatar, 53% of citizens in the United Arab Emirates cut back on major household purchases the most. • Other areas where respondents made cutbacks are for holiday / travel (44%) and clothing / footwear / accessories (42%). • On the other hand, only 10% of respondents cut back on their television provider expenses the least. 34

Cutbacks in the UK Since the beginning of the Economic Crisis, have you cut back expenses or have you not cut back expenses in the following categories: • On average, 38% of respondents made cut backs in the United Kingdom in the expense categories suggested in this study. • Apart from the categories in the IT sector (mobile phone, home internet connection and television expenses), more than a third of citizens responded that they had made cutbacks in each category. • The areas where the most expense reductions were made are in clothing / footwear / accessories (57%) and for groceries (55%). • Respondents in the United Kingdom cut back less on their home internet connection expenses with only 11% who did and 81% who did not. 35

Cutbacks in the US Since the beginning of the Economic Crisis, have you cut back expenses or have you not cut back expenses in the following categories: • While Americans remain rather optimistic in their outlook on the financial crisis, they have considerably cut back in these expense categories. • 70% of respondents in the USA have cut back the most on expenses related to their clothing / footwear / accessories, as well as on entertainment (69%). • More than half of respondents said they have cut back in 6 of the 10 categories. • On the other hand, home internet connection (13%), television (22%) and mobile phone expenses (26%) areas where Americans cut back the least. 36

Conclusion The impact of the economic crisis on the perceptions and behaviors of populations • The survey results show that there are four distinct groups of countries according to the perceptions of their population towards economic perspectives and buying behaviors. • Stronger Economy: Populations of Brazil, China, Kuwait, Lebanon, Qatar, Saudi Arabia and the United Arab Emirates are the ones who are less affected by the economic crisis, they have an above average outlook of the economic future of their country and have not significantly reduced their spending. Citizens from these countries tolerate the current economic crisis. Weakening Economy Above Average Outlook • Weakening Economy: Populations of India and Russia economic perceptions are above average but have reduced their personal spending in stronger proportion than the world average. Consequently, the economy remains fragile in the short term. • Declining Economy: Populations of Austria, Canada, Germany, and Switzerland have a below average outlook on their economy but have not yet significantly reduced their personal spending. Negative perspectives should, at least in the short term, motivate them to reduce their spending. They will remain in a negative economic cycle longer. • Failing Economy: Populations of Argentina, Australia, France, Iceland, Italy, Japan, Mexico, Spain, the United Kingdom and the United States of America are those who suffer the most from the economic crisis. Economic perspectives are below average and they have already drastically reduced their personal spending in comparison with the national average. They will probably take longer to recover. 37 India Russia Stronger Economy Brazil China Kuwait Lebanon Qatar Saudi Arabia UAE Failing Economy Below Average Outlook Declining Economy Argentina Australia France Iceland Italy Japan Mexico Spain UK USA Austria Canada Germany Switzerland Cutbacks above average Cutbacks below average * Korea and the Netherlands did not participate in the question on expense cutbacks and are not included from the March average.

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