Despite the challenging global environment but oxford Economics predicts that Southeast Asia’s economy will continue to recover over the next five years, which will boost demand for food and beverages. despite inflationary pressures But we expect real wage growth for all countries in our study in 2022 except Thailand. (Where wages will outpace inflation from 2023 onwards) as the economy continues to recover, increasing demand for workers and giving workers more bargaining power. The rhythm of tourism recovery (subject to continued easing of border measures in both countries of origin and destination) will play a key role in the performance of the agricultural and food sectors. as higher spending goes back to hospitality. We forecast that the number of tourists visiting the region will increase from 3.1 million in 2021 to 38.7 million in 2022.
Although tourist arrivals to the region fell below 123.8 million in 2019, the recovery will have a ripple effect on tourism in Southeast Asia. The economy contributed to a broad recovery in domestic demand. The region’s long-term food and beverage demand outlook is underpinned by rising wealth and living standards at home. However, there are significant risks on the horizon for the agri-food sector. Here are four key macroeconomic challenges that could hamper the sector’s progress. The first is the impact of rising inflation.
The Russo-Ukrainian Wars have pushed commodity prices up sharply across a wide range of commodity categories. At the same time we have seen an increase in measures to restrict food trade. This is because spending on food and beverages consumed at home represents a relatively large proportion of the household budget in many countries. in Southeast Asia The average household is therefore highly affected by changes in global commodity prices. This is especially true in Thailand, the Philippines and Vietnam, where food accounts for 36-37% of the CPI in a basket of goods and services. Although they accounted for 19% and 28% respectively.
Food is also a high proportion of total spending on the whole. Indonesia and Malaysia. The second challenge is demographics. Declining working-age population in some countries in Southeast Asia and the continued attractiveness of the city for young rural workers. This means that labor market conditions may worsen for the agricultural sector in particular. This led to the need for new and fast solutions to increase productivity.