With inflation staying high, some markets are anticipated to feel it more closely than the remaining in the crowd. A major focus on 2023, the global economy is anticipated to move at a multi-speed with some companies, countries and individuals being more vulnerable towards high interest rates and inflation. Some of the aspects to drive the economic environment are real estate trends, interest rates and shopping spending capabilities.
These dynamics are subconsciously creating disparities in economic growth. The European economy is projected to witness a decline while the US is shaping better with limited economic growth. In lieu, the Middle East and some parts of Asia are likely to sport a moderate growth.
Speaking of the Economic Outlook for 2023: UAE consumers shop, dine out more frequently but spend less per visit.
Some fact findings:
- UAE unemployment rates to drop in 2023, directing strength towards job seekers.
- In 2023 some countries see a drastic reduction in housing-related spending. UAE and Saudi Arabia are expected to buck the trend on the basis of many factors, especially a low unemployment rate.
- Some fact-supporting data revealed that UAE consumers in 2022 increased their grocery shopping trips by 28% as compared to September 2019. Contradictorily, they spent 21.4% less in every visit.
- The restaurant spending frequency in the country increased by 30% in 2022 as compared to 2019.
- Experts predict the average inflation rate in developed economies to drop down to 3.1 (Q4 2023) from 7.1% (Q4 2022); resulting in inflationary pressure easing out tremendously.
- Amongst the many changing consumer patterns due to COVID-19, one of the most notable practices is the surge in e-commerce preference for trusted brands.
- With broad spending comes a changing inclination of consumers to valuable and wallet-friendly brands. A global trend depicting 31% more grocery store trips in 2022 compared to 2019, with a 9% reduction in spending per visit.
- While the world illustrates a sweeping shift to digital channels, the Middle East has gracefully adopted the omnichannel offerings.
- Restaurants rescued the ‘additional losses’ in the pandemic thanks to their omnichannel presence.
Rightly concluded that the omnichannel presence of clothing stores, groceries, restaurants or any retail branch has survived the heights of lockdown compared to the brick-and-mortar-only firms. Such businesses are prone to combat inflation shocks or any downturns by coming in contact with potential customers, as per their convenience.
Middle East markets are likely to not feel the impact of inflation so strongly.