Economic outlook in transit phase

Andrew Staples, Regional Head (APAC), Policy & Insights, Economist Impact, discusses the global economic outlook at PATA’s Annual Summit in Nepal. World faces a new set of challenges, as it gradually recovers from the pandemic, he says

TT Bureau

As the global tourism industry strives to recover from the COVID-19 pandemic, it must remain vigilant and prepared for future pandemics. “Geopolitical tensions pose additional challenges, requiring careful consideration and mitigation strategies. While the road to recovery may not be without obstacles, the economic outlook indicates steady growth and promising opportunities, particularly in Asia. The dynamics of inflation, currency fluctuations, and shifting consumer trends will influence the path to recovery for the tourism sector,” says Andrew Staples, Regional Head (APAC), Policy & Insights, Economist Impact. By addressing these factors and adapting to the changing landscape, stakeholders can navigate the transition from COVID-19 to a new phase in global tourism. Here are excerpts from his speech:

The transition phase

Outlining the global economic outlook, Staples predicts steady growth for the current year without reaching stellar levels. However, he anticipates an acceleration in growth from 2024 onwards, once inflation and high-interest rates are overcome. Despite this positive outlook, he warns of the persistent risks, particularly those stemming from geopolitical tensions. “The need to be prepared for future pandemics also remains crucial, considering the significant and long-lasting impact of the COVID-19 pandemic on the global economy,” he adds.

USA recession: Opportunities and concerns

Staples turns his attention to the United States, where a significant interest rate hike has been implemented to combat inflation. While the US is expected to see a modest 1 per cent growth this year, concerns about a potential recession have emerged. However, any downturn is predicted to be shallow, with the economy quickly bouncing back. Staples brings optimism to the table, suggesting that the second half of the year holds promise for improved conditions. He highlights Asia’s role in global growth, with countries like India and China expected to contribute around 70 per cent of the overall growth.

Cost-effective Japan

Staples draws attention to currency dynamics noting that most Asian economies are likely to appreciate against the US dollar. Japan, however, stands out due to its weak currency, making it an attractive destination for travellers. He recommends taking advantage of the favourable exchange rate, emphasizing that Japan offers cost-effective opportunities for tourism. Although hotel prices are soaring, overall consumption within the country is relatively affordable.