Asia-Pacific to lead global retail sales, weather Middle East conflict

Asia-Pacific is expected to drive global retail sales over the next five years, even as the Middle East conflict is hurting consumer confidence, according to business analysts.

The war could continue to weigh on consumer and business sentiment for now due to higher energy prices and supply chain disruption, Anand Ramanathan, Deloitte Asia-Pacific’s retail and consumer products sector leader, said in an interview.

“As borrowing costs rise and financial conditions tighten, consumers and businesses face reduced spending capacity, which can dampen discretionary retail demand – even in high-growth regions like Asia-Pacific,” Ramanathan said.

A Deloitte survey of Asia-Pacific chief financial officers from consumer industries released last month said regional economies had stepped up their search for alternative energy sources amid oil and gas supply shortages.

Despite a challenging global outlook, the survey shows the CFOs remain “cautiously optimistic” about their business prospects, according to Ramanathan.

While 84 per cent anticipated a negative impact from the conflict on their company, 81 per cent expected revenue to remain stable or increase over the next 12 months, he said.