The majority of consumers in Australia, the UK, France, Germany and the US expect a global depression, a survey has revealed.
In an online study, global market information group TNS surveyed 4700 consumers aged 16 to 64 and looked at how the global financial crisis was affecting consumers.
"The consumer confidence indices we run in a number of the major economies have been trending downwards sharply as the global financial crisis has unfolded," TNS finance and business director John Shearer said.
According to the survey, the majority believed the financial crisis would continue for at least another one or two years.
Of more concern for businesses and policymakers is the decline in consumer sentiment, which shows the majority are thinking in terms of depression rather than recession, TNS said.
In Australia, Shearer said 57 per cent of consumers think the economic crisis will be of depression rather than recession proportions.
Almost seven in 10 Australian consumers say they will have to cut back spending and many are starting to change their financial priorities, he said.
"We asked Australian consumers how they would use a windfall of $1000 and, on average, only around $220 would be spent with the rest being saved or used to pay down debt," Shearer said.
"This clearly reflects a growing cautiousness among consumers, and means government stimulus programs might not be as effective as hoped in the current economic climate."
