Mastercard economic outlook for 2023

What the ‘multi-speed’ global economy means

The Mastercard Economics Institute released its annual forecast for the coming year which shows how a new multi-speed global economy will impact growth and consumer spending behavior. A multi-speed global economy means some markets will feel the impact of inflation and rising interest rates more keenly.

‘Economic Outlook 2023’ draws on a multitude of public and proprietary data sets, as well as models that are intended to estimate economic activity across Eastern Europe, the Middle East, and Africa (EEMEA) region.

The report explores four themes that will continue to shape the global economic environment — high interest rates and housing, trading down and shopping, prices and preferences, and shocks and omnichannel.

Read: Will China be the channel to achieve global growth in 2023?

Key findings


After years of a housing boom, higher interest rates are expected to squeeze the cost of living budgets, shifting the way consumers spend broadly.

In major developed countries, we expect housing-related spending as a share of goods to fall an estimated 4.5% over the course of 2023, below pre-pandemic levels.

  • In South Africa, the housing-related share of spend decreased by 1 percentage point in 2022 versus 2019.
  • In the UAE and Saudi Arabia (KSA), housing-related spend remained at the same levels (5.90% for UAE and 10.9% for KSA) in 2022 as compared to 2019.

Broad spending should remain resilient in the face of inflation, with consumers choosing wallet-friendly brands and chasing the best value.

Globally, grocery shoppers made 31% more trips to the store this year compared to 2019 – partially to reduce food waste – while their average spend per visit is roughly 9% lower.

  • As of September 2022, consumers in the UAE increased their grocery shopping trips by 28% compared to September 2019 but spent 21.4% less per visit.
  • Restaurant spending frequency in the UAE was nearly 30% higher in September 2022 than in September 2019, while the average ticket size was nearly 20% lower as even higher-income consumers rein in excess

As food and energy costs eat up a greater share of the consumer budget, lower-income households will feel an especially strong pinch.

From 2019 to 2022, we saw discretionary spending by high-income households grow nearly twice as fast as lower-income households. However, much of this gap will diminish with the normalization in inflation. The Economics Institute expects inflationary pressure to ease next year, with the average inflation rate of developed economies falling from 7.1% YOY in Q4 2022 to 3.1% YOY in Q4 2023.

  • Many markets in the Middle East and Africa show a larger gap between the affluent and non-affluent households in 2019 vs 2022 discretionary spending – Morocco (71%), Madagascar (70%), Jordan (60%), Senegal (55%), Kenya (39%) and Zambia (34%).
  • In Qatar, however, the trend is different. From 2019 to 2022, discretionary spending for affluent cardholders grew 104.9% while discretionary spending for non-affluent cardholders grew 103.9% a difference of 1 percentage point.

Businesses with an omnichannel presence are likelier to withstand shocks by meeting the customer where they want to shop.

Our analysis suggests that having a multichannel presence provided a 6-percentage point lift in retail sector sales through 2022[5]. Small and large restaurants were saved from losing an additional 31% of sales during the height of lockdowns with their omnichannel presence. Similarly, small omnichannel clothing stores outperformed online-only and brick-and-mortar-only firms, growing 10% and 26% faster, respectively.

You can view the full Shifting Wallets: New consumer spending habits report here.

For more on the economy, click here.