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Tourism will drive spending in Asia Pacific

The Mastercard Economics Institute's Economic Outlook 2023 revealed that Asia Pacific consumption appetite has broadly returned to the pre-pandemic level and will be further driven by tourism next year. The report said that in high-income places such as Hong Kong, reopening euphoria has continued to dominate as retail strength goes beyond essentials like food and energy to travel and discretionary retail. The institute expects travel, hospitality services, and experiences will continue rising as a share of total consumer spending, while the share of big-ticket durable goods will decline. David Mann, an economist at Mastercard, said that Northeast Asia border openings are set to be a big swing factor for Asia Pacific. Mann said consumers trading down brands and shopping at stores where they can be more frugal on necessities are making way for reopening excitement, especially for tourism-dependent economies.

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