December 24, 2021: Ahead of the pandemic’s second year milestone, the Mastercard Economics Institute released Economy 2022, a global outlook for the coming year. Based on critical trends, the report reveals how five fundamental factors — savings and spending, supply chains, digital acceleration, travel, and a growing list of economic risks — will continue to shape the global economy.

Key findings include: 

• Travel: Uptick in leisure travel recovery as international travel opens up, with medium and long-haul flights to gain ground in 2022. While travel restrictions impacted the slow rate of recovery across the region in 2021, with only a few markets in Asia Pacific witnessing a rebound in domestic travel – such as Australia, who saw trips returning to nearly 69% of pre-pandemic levels – the view for 2022 is optimistic across the region.

• Savings & Spending*: Excess savings in the developed economies of Asia Pacific are a source of strength in consumption in 2022 and beyond. A faster scenario for spending excess savings would mean a two percentage point 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 three percentage points to global GDP growth in 2022 as pandemic restrictions ease.

• Digital: 20% of the digital shift in retail stays put – reshaping how and what consumers buy. E-commerce subscriptions gained traction in 2021 as nearly 88% of countries across 32 markets saw a surge in subscription services compared to the previous year – on average, retail subscription share of total spend increased by a factor of 1.25 from 2020 to 2021 across 6 Asia Pacific markets. Notably, car companies, virtual workout partners, bike rentals and pet services are among a slew of businesses benefitting from this model.

• Supply Chains: Household spending on services in Asia is expected to accelerate while goods demand also stays robust in 2022. Whilst supply chain disruptions continue to linger on, prolonging high logistics costs and a surge in global commodity prices, exports remain a major positive factor for the region.

• Risks: Risks remain with the potential to disrupt the global economy. New COVID variants like Omicron 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.

“Although the past year remained shrouded in uncertainty, we are optimistic about the year ahead, and expect 2022 to be the year of travel recovery for Asia,” said David Mann, Chief Economist, Mastercard AP & MEA. “Whilst 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.”

*Methodology

The Mastercard Economics Institute draws on aggregated and anonymized sales activity in the Mastercard network among other sources to develop a measure of the quantity and prices of goods vs services consumed for economies throughout the world.

You can view the full Economy 2022 outlook here. This is the third outlook report from the Economics Institute; other reports can be found here.  

Regional Statistics

Asia Pacific

Singapore

• In Singapore, short, medium and long-haul trips at 7% 25%, and 23%, respectively
• In Singapore the quantity demand for goods and services are on par
• In Singapore, retail subscription share of total spend increased by a factor of 1.3x from 2020 to 2021

Australia

• Excess savings in Australia is expected to reach about 275,069 million AUS$
• In Australia domestic trips are around 69% of pre-pandemic levels, with short, medium and long-haul trips at 5% 19%, and 21%, respectively
• In Australia the quantity demand for services is outpacing the quantity demand for goods
• In Australia, the online share of spend in the Restaurants-Bars sector is 4.5 percentage points higher than the pre-pandemic trend, a 38% gap
• In Australia, the online share of spend in the Retail sector is 4.3 percentage points higher than the pre-pandemic trend, a 23% gap
• In Australia, retail subscription share of total spend increased by a factor of 1.6x from 2020 to 2021

New Zealand

• Excess savings in New Zealand is expected to reach about 6,312 million NZ$
• In New Zealand the quantity demand for goods and services are on par
• In New Zealand, the online share of spend in the Restaurants-Bars sector is 4.4 percentage points higher than the pre-pandemic trend, a 42% gap
• In New Zealand, the online share of spend in the Retail sector is 2.1 percentage points higher than the pre-pandemic trend, a 12% gap

Thailand

• In Thailand, the online share of spend in the Restaurants-Bars sector is 5.1 percentage points higher than the pre-pandemic trend, a 364% gap
• In Thailand, the online share of spend in the Retail sector is 1.7 percentage points higher than the pre-pandemic trend, a 29% gap

Japan

• Excess savings in Japan is expected to reach about 38,287 billion Yen
• In Japan domestic trips are around 52% of pre-pandemic levels, with short, medium and long-haul trips at 3% 20%, and 19%, respectively
• In Japan, retail subscription share of total spend increased by a factor of 1.4x from 2020 to 2021

Other

• In Malaysia, retail subscription share of total spend increased by a factor of 1x from 2020 to 2021
• In Indonesia, retail subscription share of total spend increased by a factor of 1.2x from 2020 to 2021
• In Korea, retail subscription share of total spend increased by a factor of 1x from 2020 to 2021