discretionary spending

The Middle East conflict is impacting Asia Pacific's commercial real estate through rising energy costs and inflation. This is affecting logistics, retail, and office sectors, while investment markets face growing uncertainty due to potential interest rate shifts. Broader macroeconomic channels are expected to shape the region's property outlook.

In fact, ⁠IT has been the worst-performing major sector in the Indian market over the past 12-18 months. In May, 2026, the Nifty IT index touched a near 3-year low, losing more than a fourth of its value since the start of the year.

India's gold demand has plummeted by nearly 70% following a government increase in import duty from 6% to 15%. This, coupled with rising fuel and food prices, has significantly dampened consumer sentiment and spending on discretionary items like gold.

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Every Re 1 hike in petrol, diesel, CNG, and LPG costs feeds into inflationary pressures in the economy, and also indirectly impacts discretionary spending, hence hitting growth channels.

Summer travel is splitting along income lines as soaring airfares and hotel costs deter budget-conscious families. Wealthier Americans continue to splurge, while middle and lower-income groups are cutting back or delaying trips. This K-shaped trend sees fewer Americans planning vacations, with even those earning up to $200,000 annually reducing travel plans.

India's transportation fuel demand growth is set for a sharp slowdown in late 2026. Higher prices, government conservation efforts, and a weakening rupee are impacting mobility. Analysts have significantly cut growth forecasts, with petrol demand facing the steepest decline due to reduced commuting and discretionary travel.

Air India assures employees no layoffs are anticipated despite financial strain from the Middle East conflict. However, annual salary increments will be deferred by at least a quarter. CEO Campbell Wilson urges a "laser sharp focus" on cost reduction, eliminating waste, and suspending discretionary spending to navigate these challenging times. Variable pay and planned promotions will continue.

Air India has assured employees there will be no layoffs despite significant losses exceeding Rs 22,000 crore last fiscal due to various "black swan events." However, annual increments will be deferred by at least a quarter, and employees are urged to cut discretionary spending to manage costs in the uncertain economic climate.

Air India has significantly reduced its flight schedule, cancelling around 200 weekly services from June to August due to soaring jet fuel prices and a depreciating rupee. These cuts follow previous reductions and aim to combat substantial losses. The airline is also exploring cost-saving measures like making meals optional on certain flights and unbundling lounge access for business class passengers.

A US-Israeli war with Iran has triggered significant global economic fallout, with companies reporting at least $25 billion in losses due to soaring oil prices and disrupted trade routes. Businesses worldwide are implementing cost-cutting measures, including price hikes and reduced production, as the conflict impacts various sectors, particularly airlines.

Get ready for pricier meals as India's restaurants and delivery apps plan a 5-10% food cost increase from next week. Soaring fuel prices, coupled with LPG shortages and staff issues, are forcing businesses to pass on rising transportation, packaging, and input expenses. This move disrupts annual pricing cycles, impacting dining out and delivery costs.