Global economic growth is forecast to slow in 2023, as businesses and consumers remain constrained by the adverse combination of persistent inflation and high interest rates. This will impact sales for the fashion industry, as consumers are generally expected to be more cautious in their discretionary spending. A slowdown is expected in the Eurozone and UK where inflationary pressures remain high and monetary policies tight, while growth prospects remain strong in emerging economies.
This report comes in PPT.
The global economy is expected to slow significantly in 2023, with global real GDP growth forecast at 2.5%. This constitutes low growth by historical standards, resulting from persistent inflation and rising interest rates, affecting businesses and consumers globally. Nevertheless, the global economic outlook has improved slightly in both advanced and emerging economies, amid high resilience and China’s recovery. Nonetheless, uncertainty remains unusually high, due to a multitude of risks and headwinds, which keeps the likelihood of a downside scenario for the global economy in 2023 elevated.
The US and Eurozone will record only low real GDP growth in 2023, even if both economies have surprised to the upside in the first half of 2023, with labour markets remaining tight and consumer spending still resilient. However, persistent inflation beyond food and energy, as well as steadily rising interest rates, will weigh on growth in the US and Eurozone in 2023. In these markets, economic growth in 2023 and 2024 will remain relatively subdued, amid inflationary pressures and high interest rates, impacting consumers’ ability to spend on apparel and footwear.
The global economy will see a considerable discrepancy in growth between advanced and emerging economies in the near future. Despite headwinds, economies in emerging markets in Asia Pacific, including India and Indonesia, as well as in Latin America, continue to surge and provide new areas for growth for apparel and footwear players. China’s faster than expected rebound following its post-zero-COVID reopening has already provided international fashion players with a boost, and is set to support global growth in the industry.
Apparel is the aggregation of clothing and footwear. This dataset covers retail sales of apparel through both store-based retailers and non-store retailers. Excludes black market sales (i.e. untaxed, generated within informal retailing)and duty free sales (travel retail). Items must be new when sold to the consumer; second-hand/used items are excluded. Antique and/or vintage clothing and footwear is also excluded.
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