When will the global consumer class recover?
On Black Friday, this year’s shopping will reach its peak. In the exceptional circumstances of 2020, the peak will not be high. The COVID-19 pandemic is a truly global economic crisis, with all countries likely facing a contraction in consumption. According to the IMF’s latest projections, only Guyana will perform better in 2020 than it did in 2019; per capita growth in 170 out of 190 economies will actually be negative. During the global financial crisis of 2008-2009, Asia made up for the decline in OECD economies. In fact, because of Asia’s rise, the global middle class kept growing through the global financial crisis. In 2020, all world regions will contract at unprecedented levels, especially Asia, which today represents more than half of the global consumer class (people who spend more than $11 per day).
THE WORLD’S CONSUMER CLASS IS SET TO SHRINK IN 2020
This analysis builds on earlier posts on the global consumer class, which we define as anyone spending more than $11 per day (in 2011 PPP). For our new post-COVID-19 projections, we include the latest IMF World Economic Outlook (WEO) released October 2020, the latest World Bank spending projections based on 200 new datasets, and the updated demographic forecasts for every country by the International Institute of Applies Systems Analysis (IIASA) before integrating the latest sub-national projections.
This year, for the first time in half a century, the global consumer class will shrink. Before COVID-19 broke out, we estimated that the global consumer class stood at around 4 billion people spending approximately $55 trillion per year. Post-COVID-19, the global consumer class is 120 million people smaller than it was in 2019. Because of population growth, the COVID-19 outbreak has added almost 200 million people to the group of poor and vulnerable (people spending less than $11 per day) in 2020.