The total amount of private household spending is increasing year by year worldwide. Over the last 10 years, global household final consumption expenditure has increased by more than 18 trillion dollars – from $46.5 trillion in 2010 to $64.8 trillion in 2020.
The bad news. This growth has been extremely unevenly distributed. It has exacerbated inequality between the different regions of the world and between poorer and richer households.
The figures are frightening.
The rich got even richer
The most financially demanding source of private household expenditure in wealthy countries are housing, food, mobility and leisure. However, there are major differences: The poorer a household, the larger the share of housing expenditure. By contrast, the wealthier a household is, the more it spends on leisure.
Over the past decade, overall household final consumption expenditure has increased worldwide by slightly over three per cent per year. The Brookings Institute – a nonprofit public policy organization – has calculated who has benefited from this growth. The institute uses World Bank data from 167 countries. Private households are divided into four groups: the poor, the vulnerable, the middle class and the rich.
Around the globe, the middle class experienced the largest increase – 52 per cent of the total spending gains. The vulnerable group saw around one-third of the spending growth. The rich, making up only two per cent of the global population, got 13 per cent out of the headline growth. The poor got the least. They gained just one per cent of the total spending increment in the world in the last 10 years.
Worst 10 countries in household consumption distribution
This unequal distribution can be attributed to two main factors: geographical distribution and the distribution of income. Households in North America, where only five per cent of the world’s population lives, gained 17 per cent of the spending growth. Asian households (32 per cent of the population) saw 40 per cent of the increment. Every other region received less than its population share. Sub-Saharan Africa got the smallest share: 13 per cent of the global population live there and yet only experienced 0.6 per cent growth per year.
As a second factor of the unequal distribution, the rich got a disproportionate share of the growth in many countries. At the top is the USA: The rich (28 per cent of the Americans in 2010) gained almost two-thirds of the spending increase. Here are the top 10 countries when it comes to consumption growth distribution in the past decade:
–Scoop Me/Phillipp Stadler
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