Consumers reopen their wallets

The Lunar New Year holiday wasn’t quite back to normal this year as fears of spreading COVID to elderly relatives prevented many households from returning to their hometowns – long-distance journeys, while the highest since the start of the pandemic, were still 45% below 2019 levels. That didn’t stop consumers from engaging in a bit of “revenge spending” closer to home, however. According to the State Tax Administration, receipts at consumer-facing businesses were 12% above 2019 levels. That’s in line with separate data showing strong gains in cinema and restaurant sales. Spending at domestic tourist sites is recovering more slowly but still reached 73% of 2019 levels, the most since mid-2021, a time when the economy was booming and virus disruptions were minimal. All of this is consistent with our expectation for a rapid rebound in consumption during the first half of this year.