A sudden drop on Consumer Spending

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The willingness of consumers to spend has been seen to dampened over the past quarters in the country. Among the spending patterns, the industries that used to be the most exposed categories, such as cosmetics and hospitality, have been significantly disrupted.

Furthermore, temperature checks, queues, social distancing, and policies about accommodating about 50% only of the usual number of customers have affected and diminished the interest of shopping and dining out, including fashion and homeware consumption and food services.

Consumer spending is what households buy to satisfy and meet everyday needs. This consumption covers both goods and services. It is worthy to note that each one of us is a consumer. The things we buy each day build the demand that retains companies profitable and hiring new employees to work with them.

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Why is there a need to mention these things?

The reason is that it has an effect on the economy. It is a vital driving force in the economy and a crucial concept in economic theory. It is also the most essential short-run determinant of the performance of the economy and is a fundamental element of aggregate demand.

If the spending behavior of consumers remains high, this is good for the economy. On the other hand, if consumer spending declines, it implies that gross domestic product (GDP) will be affected. With this, it signifies a negative impact on the economy.

Even a small escalation down in consumer spending could damage the economy. As it falls off, economic growth slows down. If prices drop, it creates deflation. And if slow consumer spending continues to happen, there would be a contraction in the economy.

Based on the data that was presented online, consumer spending in the country dropped by 15.5%. This affects the gross domestic product (GDP) of the country. But with mitigating actions, this could bounced back.

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With the little by little opening of business industries, necessary actions should be taken. This is one factor that I see, which can help in bringing back the confidence of consumers when it comes to spending.

While the government is taking more focus on having a successful vaccine in the soonest possible time or getting vaccines from other countries that have developed it already such as Pfizer, among others, I as a consumer will do the necessary actions such as following the safety protocols and all to help end the problem and the pandemic to regain confidence when it comes to spending.

Use of Technology

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I will also encourage others to make use of the technology if they are afraid to go out. Another way will be reinforcing positive spending behavior, such as spending smarter so that the money would go further.

It is the threat of the virus that caused the decrease in consumer spending. So, once these things are appropriately done, the economy will bounce back from its sharp fall, and the same holds true with the consumers' confidence.

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Ang kumpiyansa ng mga mamimili na gumastos ay talagang makikitang nabawasan mula sa nakaraang quarters sa bansa. Kabilang sa mga pattern ng paggastos, ang mga industriya na dati ay ang pinakanakalantad na mga kategorya ay napinsala nang malaki.

Ang banta ng virus ang siyang sanhi ng pagbawas sa kumpiyansa sa paggasta ng mga mamimili. Kaya, sa sandaling ang mga bagay na ito ay tuloyang maresolba, ang ekonomiya ay muling aangat mula sa malalim na pagbagsak nito, at gayundin sa kumpiyansa ng mga mamimili.

This is somewhat a deep topic to talk about, but if ever you read it, I hope you appreciate it. Some words that are used are common terms of economics. If you have thoughts and or ideas regarding this read, please allow me to know it by writing it in the comment section below.