THRIVE ISSUE 6 DECEMBER 2025 10 Sanisha Packirisamy, Chief Economist, Momentum Investments Tourism&The Economy A Global Overview Tourism As A Key Economic Driver Insights on the Global Economy Extended Period of Slow Growth Tourism is an important economic driver, and more so a critical socio-economic driver for job creation Picture this: Buckingham Palace in London early in the year 2020 - pre-COVID – was bustling with tourists. Not even severe weather could deter tourists from getting a good view of the palace. By October of the same year, the picture looked vastly different. “Only a few masked tourists could be seen trickling in.” As reported in the media, this experience was replicated in many other tourism hotspots across the globe – from Disneyland in Orlando, Florida, to Venice, Italy, and many parts of Asia and the Pacific – reminding us of the kind of devastation a major global phenomenon such as a pandemic can cause. To illustrate the gravity of the situation: at the height of the pandemic in 2020, about 63 million jobs were lost worldwide compared to 2019. Not only did these job losses occur in 2020, but they also did not return in 2021. By 2022, when most markets had reopened, we were still down about 39 million jobs across the global economy compared to the same period in 2019. Fast forward, and it seems the economy has adapted to the uncertainty and unpredictability of the Trump administration in the US. As a result, global tariff rates were slightly lower than initially indicated, and some certainty began to emerge. For now, it seems there is less than one in three chances of a recession in the next while. Essentially, markets have breathed a sigh of relief. We’ve seen equity markets back off to the races again, however we are still in quite a slow growth environment. Looking ahead to 2025 and beyond, recall April 25, when the US government announced the Liberation Day tariffs. It was quite a depressing mood on the markets. We saw equity markets collapse on the back of the news. We saw measures such as the New York Fed recession probability indicator basically pricing in a 70% probability of a recession for the global economy in the next 12-month period. While we may avoid a recession, this decade will likely experience the slowest growth rate since the 1960s. So yes, we are probably going to escape a recession as the global economy, but we are still in a slow growth environment and that has an impact on consumers and their ability to spend on discretionary items such as tourist activities.
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