Global Overview of Income and Expenditure

Delivery

This report comes in PPT.

Key Findings

Slowdown and divergence in disposable income growth

Global disposable income rose by 3.4% in real terms in 2023, driven by growth in Asia Pacific and North America. By 2040, global disposable income growth is projected to slow down to a CAGR of 2.6%, with emerging and developing regions leading the expansion. Notably, emerging and developing Asia will see a CAGR of 4.5%, underlining its strong economic momentum.

Asia Pacific on the quest to overtake North America in spending

With a projected real growth of 49.8% in consumer spending over 2023-2040, Asia Pacific is set to overtake North America as the largest region for consumer expenditure. Developed Asian nations such as Japan and South Korea are expected to drive a significant increase in spending, though still lagging behind China. South Asia will experience the fastest growth rates in the region.

Global wealth surges

In 2023, the global wealthy population expanded by 6.4%, driven by an addition of 2.4 million individuals, predominantly from the US, Germany, the UK and France. While total wealth grew by 6.9% globally, China, Russia, Canada and Japan saw a decline in wealth. The US remained the leading market, accounting for 48.7% of wealthy adults, with wealth increasing by 7.8% over 2023.

Food, health and education retain their importance

Between 2023 and 2040, global consumer spending on food and non-alcoholic beverages will rise in real terms, with consumers raising their budget allocations on essentials such as fish and dairy, as well as health-focused products. Education will be the fastest-growing category, driven by the growing demand for upskilling and reskilling.

Rising income inequality

Income inequality is expected to worsen, with the Gini Index rising in 63 of 103 countries, including the US, China, Germany, Japan and India, by 2040. Social class E, representing individuals earning less than half a country’s average income, will grow by 19.7%, necessitating targeted strategies to meet their needs and preferences.