Inflation refers to the steady rise in the overall price levels of goods and services within an economy. In recent years, we have witnessed a notable uptick in global price levels, resulting in a reduction in our purchasing power and a profound impact on consumer behavior. This report presents data collected from 128 individuals across 10 regions and countries.
Income Trends (On Average):
- In the United States of America, Europe, and the United Kingdom, incomes have either increased less than the rate of inflation or not increased at all.
- In Pakistan, Northern Africa, and East Africa, incomes didn’t experience any discernible growth.
- In Southeast Asia, India, and East Asia, incomes grew in line with or even exceeded the rate of inflation.
- In the Middle East, income trends showed ambiguous results, with half the population reporting that their incomes grew in line with inflation, while the other half experienced stagnant income levels.
Ranking of Price Increases for Commodities:
- Respondents from Pakistan, the Middle East, Southeast Asia, and India reported the highest price increases in food, followed by utilities, transport, healthcare, education, housing, and entertainment.
- Respondents from the USA, UK, and Europe reported housing as experiencing the highest price increase, followed by food, utilities, transport, entertainment, healthcare, and education.
Investment and Savings:
- Approximately 47% of the respondents plan to save their money rather than invest right now.
- Approximately 53% of the respondents plan to invest their money in fixed assets, property, etc., before inflation surges.
- About 60% of the respondents are now more likely to bargain for better prices and negotiate before making a purchase.
- About 70% are now more inclined to opt for second-hand items, such as cars; however, this primarily includes middle- and low-income earners, as upper-class individuals rated this as “very unlikely” on the scale.
- More than 80% of the population in all countries now finds it more cost-effective to purchase goods online than make in-store purchases.
- 58% are now more likely to stock up on certain commodities to mitigate the impact of changing prices.
- Despite the increase in grocery prices, only 18% of individuals have expressed confidence in reducing the quantity of items they purchase from the supermarket.
Recreational and Luxury Spending:
- More than 65% of the population has reduced their expenditure on high-end electronics, designer clothing, luxury cars, and accessories, while 38.3% continue to make such purchases, mainly comprising upper-middle and upper-class individuals.
- 64.8% of the population expressed their willingness to cut back on their recreational spending and outings; however, 37% are still somewhat reluctant to decrease their recreational activities, rating their willingness as a “3” on the scale.
- More than 55% rated it “unlikely” to reduce their expenditure on ordering food from restaurants and dining out instead of eating home-cooked meals.
List of Major and Specific Expenses That People Had to Cut Back On:
- Dental healthcare
- Beef and chicken
- Branded clothes
- New phones or gadgets
- Air travel
- Internet and mobile subscriptions
- Moving to a new apartment
- House and car maintenance
- Pet food
Perceived Causes and Consequences of Inflation in Different Regions:
- Political instability
- Lack of foreign investment
- Growth of money supply to finance budget deficits
- High dependency on imports for basic necessities
- Lack of implementation of law and order
- Continuous depreciating currency
- High illiteracy rate
- Natural disasters
- Lack of education and healthcare facilities
- Illegal transactions and black money
- High taxes on basic commodities
- Lack of payment gateways for freelancers to bring in foreign currency.
United States of America:
- War in Ukraine
- Expensive housing for average households
- Aftermath of COVID-19
- Lack of social welfare programs due to political motives
- Poor trade agreements
- Extremely high taxes
- High government debt and loans.
- Overdependence on the tourist industry coupled with lower-than-anticipated tourists
- Closed market economy and high bank charges
- Limited access to loans
- Expensive real estate
- COVID-19 aftermath
- Decrease in trade surplus
- High VAT and sales tax.
- Lack of social welfare programs
- War in Ukraine
- Middle-class people burdened by taxes
- Over-expenditure on tourism and luxury industries.
- High population
- Lack of subsidies and opportunities for startups
- High oil prices.
- Consequences of leaving the European Union
- High oil prices
- Wage strikes by nurses and teachers causing chaos
- Higher tax burden on middle and lower-income people
- Dependence on the import of essential items such as food products
- Current party in power – The Conservatives.
- Lack of industries to process natural resources
- Lack of exports
- War in Ukraine
- High government debt.
- International debt
- Currency depreciation against the dollar.
- Mostly upper-middle and upper-class individuals have maintained their previous charitable giving, while lower-middle and lower-class individuals have had to significantly reduce the proportion of their previous charity/donations.
- While travel and vacation plans have significantly reduced by 70% for all Pakistanis, individuals in the US and Europe have experienced minimal to no impact on their holiday plans.
- Pakistan and North Africa showed the least confidence rate in the economy, followed by the US, UK, and Europe. The Middle East and India showed a higher confidence rate, but the overall population rating suggests people are skeptical about the current and future situation of their countries and the world economy.