At least that is what one global payment firm’s think tank is reporting, based on trends from its 231m card holders.
Drawing on aggregated and anonymized sales activity, critical trends and other factors in its global customer network, Mastercard’s think tank has released its outlook for 2022.
The Mastercard Economics Institute report reveals five factors that will continue to shape this year’s global economy amid a continuing coronavirus pandemic.
Key findings include:
- Travel: Uptick in medium and long-haul flights as leisure travel recovers
While travel restrictions impacted the slow rate of recovery across the region in 2021—with only a few markets in the Asia Pacific region (APAC) witnessing a sustained rebound in domestic travel—the view for 2022 is optimistic across the region.
- Savings & Spending: Excess savings are a source of strength in consumption
A faster scenario for spending excess savings would mean a 2% acceleration in consumer spending growth for several markets in 2022, including Australia, New Zealand, Japan, and Korea. Globally, consumer spending of built-up savings could contribute an additional 3% to global GDP growth in 2022 if/when pandemic restrictions ease.
- Services sector: Growth of retail subscription services in the region
Nearly 88% of countries across 32 markets saw a surge in subscription services compared to the previous year. On average, the share retail-subscription in total spend from 2020 to 2021 had increased by a factor of 1.25 across six APAC markets. Notably, car companies, virtual workout partners, bike rentals and pet services were among a slew of businesses benefitting from this model.
- Supply chains: Exports will continue to grow
While supply chain disruptions continue to linger and prolong high logistics costs and a surge in global commodity prices, exports remain a major positive factor for the region.
- Uncertainties: Pandemic and other factors could detail recovery
New coronavirus variants such as Omicron (and now its sub-variants) pose the biggest immediate risk. However, there are identified additional risks that have the potential to derail recovery, including a sharp recalibration of housing prices, a surge in oil prices, and fiscal cliffs in advanced economies.
According to David Mann, Chief Economist, Mastercard (AP & MEA): “Although 2021 remained shrouded in uncertainty, we are optimistic and expect 2022 to be the year of travel recovery for Asia. While the recovery trend across the region may be non-linear, we anticipate pent-up demand and savings will finally be released by consumers, evidenced by the recovery of ‘out-and-about’ categories such as apparel and beauty. The continued strength in e-commerce, and pandemic categories such as home improvements and hobbies will also be bolstered by a steady rise in the subscription economy, painting a positive picture despite the lingering threats of new variants, inflation and supply chain disruption.”