A high restaurant index often indicates larger inflationary tendencies. Rising prices for materials, labor, and operations are passed on to customers, raising total living expenditures. This can have a knock-on impact on other areas of the economy, further squeezing household budgets and lowering discretionary expenditure.
Aside from the internal consequences of a high restaurant index, there are also consequences to foreign revenue. Tourists frequently assess the worth of an area based on its cost of living, which includes dining costs. When restaurant rates are unreasonably high, tourists may choose more economical options outside Africa, harming the hospitality sector and local economies that rely on tourism.
