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People fed up with ‘shrinkflation’ as 2023 wraps up

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People will have more money to spend in the next year as red-hot prices cool off slightly in many places but still almost half of the global public are seeing red over products getting smaller but prices staying the same.

The latest Ipsos Global Inflation Monitor reveals a nuanced picture of the world grappling with the cost-of-living crisis, accompanied by small glimmers of economic optimism in various countries. Despite ongoing inflationary pressures, the global public’s mood reflects both concerns and subtle signs of resilience.

SHRINKFLATION; INFLATION STRAIN AND RECESSION PERCEPTION

While global experts warned of a potential severe recession in 2023 due to central banks raising interest rates, only a few countries are technically in recession. However, 46% of the public across 33 countries perceive their country as being in recession, a slight decrease from 49% in April 2023.

The expectation of rising unemployment remains high, with 59% globally anticipating fewer jobs in 2024. Several countries have witnessed an increase in this expectation since the previous survey.

SHRINKFLATION; FINANCIAL PRESSURES AND COST-OF-LIVING CHALLENGES

Six in ten individuals across 33 countries are experiencing some level of financial pressure. Approximately 27% find it difficult to get by financially, while 33% are just about getting by.

The easing of inflation rates in some countries has led to a gradual reduction in the difficulty of getting by, with percentages decreasing in France, Great Britain, and Germany compared to April 2023.

GLOBAL CONCERNS AND OPTIMISTIC OUTLOOK

Inflation remains a significant concern, with 62% across the surveyed countries expecting it to rise in the coming year. This aligns with the consistent ranking of inflation as the top global worry for the past 20 months.

Despite the challenges, about one in three (32%) express optimism that things will return to normal within the next year. Conversely, 21% believe inflation will never return to normal, with India and South Africa recording the highest levels of pessimism at 37%.

SPENDING EXPECTATIONS AND RISING COSTS

Expectations for rising spending persist, with almost seven in ten individuals expecting increased costs in food shopping (69%), utilities (68%), and other household shopping (66%) over the next year.

SIGNS of Optimism Amid Challenges

  • Data across five waves of the Inflation Monitor suggest a slightly less pessimistic global public mood about the economic outlook compared to 2022 when inflation was surging due to various factors.
  • Expectations for rising inflation have decreased in several countries, with notable declines in Germany and Great Britain between April 2022 and November 2023.
  • Expectations for falling disposable incomes have softened globally, with 29% anticipating a decrease (-4pp from April 2023) and 31% expecting a rise (+2pp).
  • Lower expectations for increases in various expenditures, including grocery shopping, indicate a cautious but hopeful outlook.

SHRINKFLATION AND CONSUMER SENTIMENTS

Nearly half (46%) of consumers globally have noticed product sizes shrinking while prices remain the same, a phenomenon known as ‘shrinkflation.’ The highest awareness is in European countries, led by Great Britain (64%).

While 22% find it acceptable as a response to rising costs, 48% globally consider ‘shrinkflation’ unacceptable. The French express the highest disapproval at 67%.

Controversies around ‘shrinkflation’ have prompted actions such as the European Commission labelling it a “deceptive marketing technique” and the French government considering legislation for consumer notifications.

The Ipsos Global Inflation Monitor not only captures the ongoing economic challenges but also reflects the resilience and adaptability of individuals in the face of a complex global economic landscape.

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