Global: Consumer squeeze drags on short-term city prospects
Surging inflation has dampened the outlook for consumer spending, which will contribute to a global recession over the coming months. We forecast consumer spending to fall in most European and Latin American cities in 2023, in contrast to cities in other parts of the world, especially Asia, where spending is expected to hold up better.
What you will learn:
- While high inflation is nothing new for developing countries, it is primarily the advanced economies that have been suffering this year.
- The composition of spending will be driven by several factors in the short term: lifting of Covid19 restrictions, efforts to reduce energy consumption, and lower real incomes weakening discretionary spending.
- Over the medium term, Asian and African cities will see the strongest consumer spending growth. Middle Eastern and Northern American cities are in the middle of the pack, while European and Latin American cities will see the smallest increase.
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