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December 7, 2022
BUSINESS

Consumption to grow by USD 95 bln per year until 2016

According to a study authored by MasterCard Worldwide, consumer spending in transitional European countries (Belarus, Bulgaria, Czech Republic, Georgia, Hungary, Poland, Romania, Slovakia and Ukraine) will grow by a cumulated USD 95 bln per year until 2016, Mediafax informs. “Consumers from emerging markets will have a far higher influence on global economic growth in the next five years, which represents a major shift in consumption, from West to East,” the MasterCard study reads. The ‘Consumer Spending Outlook and Value Creation in the New Global Economy’ report estimates that from 2012 to 2016 emerging markets will add to the global economy on average USD 1.2 trillion per year in consumer spending, while developed markets will add only approximately USD 700 bln. The report examines the economic implications that the changes in global consumption will have on business, stressing the relation between consumption and the creation of value in a market economy.

“It’s consumer demand that ultimately determines whether businesses, after the investments required to develop their products and services, have succeeded in creating value,” Yuwa Hedrick-Wong, global economic advisor MasterCard Worldwide, stated, being quoted in the report.

The developed markets’ share of household consumption will drop from 77.4 per cent in 2008 to 58.3 per cent to 2016, while the emerging markets’ share will grow from 19.5 per cent in 2008 to 38.7 per cent in 2016. The transitional markets’ share will remain unchanged. Together, these three types of markets concentrate the highest share of consumer spending at global level. The report notes that from 2000 to 2008 developed markets represented 88.2 per cent of the global growth in discretionary spending, emerging markets represented only 9.2 per cent and transitional markets 2.6 per cent.

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