Qatar consumers are seen minimising spending gap between affluent, non-affluent households, according to Mastercard Economics Institute’s Economic Outlook for 2023.
The forecast for the coming year shows how a new multi-speed global economy will affect growth and consumer spending behaviour. The report indicates that some markets will feel the impact of inflation and rising interest rates more keenly.
As food and energy costs eat up a greater share of the consumer budget, lower-income households will feel an especially strong pinch, shows key findings in the report.
From 2019-2022, discretionary spending by high-income households grew nearly twice as fast as for lower-income households. However, much of this gap will diminish with the normalisation in inflation.
The Mastercard Economics Institute expects inflationary pressure to ease next year, with the average inflation rate of developed economies falling from 7.1% y-o-y in Q4, 2022 to 3.1% y-o-y in Q4, 2023.
Many markets in the Middle East and Africa show a larger gap between affluent and non-affluent households in 2019 vs 2022 discretionary spending, e.g., Morocco with 71% and Jordan with 60%.
Qatar, however, is bucking the trend. From 2019-2022, discretionary spending for affluent cardholders surged by 104.9% while discretionary spending for non-affluent cardholders increased by 103.9% – a difference of one percentage point.
After years of a housing boom, higher interest rates are poised to squeeze cost-of living-budgets, shifting the way consumers spend broadly. In major developed countries, the outlook anticipates housing-related spending as a share of goods to fall an estimated 4.5% over the course of 2023, below pre-pandemic levels.
In most EEMEA markets, housing-related spend remained at the same levels in 2022 as in 2019, the Outlook showed.
Broad spending should maintain resilience in the face of inflation, with consumers choosing wallet-friendly brands and chasing the best value.
Globally, grocery shoppers made 31% more trips to the store this year compared to 2019 – partially to reduce food waste – while their average spend per visit was roughly 9% lower.
Businesses with an omnichannel presence are likelier to withstand shocks by meeting customers where they want to shop. The analysis suggests that having a multichannel presence provided a six-percentage-point lift in retail sector sales through 2022.
Small and large restaurants were saved from losing an additional 31% of sales during the height of lockdowns with their omni-channel presence. Similarly, small omni-channel clothing stores outperformed online-only and brick-and-mortar-only firms, growing 10% and 26% faster, respectively.