Forecast: World’s Largest Economies in 2020

Analyst Insight by Media Eghbal, Country Insight Managing Editor, Euromonitor International

Euromonitor International predicts that in 2020, emerging markets will dominate the top five largest economies.The most symbolic shift will be when China overtakes the USA as the largest economy globally. This Q&A will answer some of the key questions about what our forecasts of the world’s largest economies mean and what implications this will have for global consumer market development. Emerging economies are driving global economic growth but advanced economies will retain a competitive advantage with higher per capita incomes and greater consumer market expenditure, while governments in developing countries face challenges in keeping up with the pace of economic growth.

Euromonitor predicts that the world’s five largest economies in 2020, measured in Purchasing Power Parity terms (PPP) will be:

Source: Euromonitor International Euromonitor International from national statistics/Eurostat/OECD/UN/International Monetary Fund (IMF), International Financial Statistics (IFS)

The three biggest emerging economies will account for around 30.0% of global GDP in PPP terms in 2020 compared to 23.5% in 2012 when there were just two emerging markets amongst the five largest economies (1. USA 2. China 3. India 4. Japan 5. Germany). The most discernible shift in global power towards emerging market economies is expected to take place in 2017 when China will become the world’s largest economy.

Global Pharmaceuticals Industry 2012

Global pharmaceuticals revenue growth slipped in 2012 recording 2% annual growth. China, US and Japan remain the main payers in the industry. China will continue to strengthen its positions in the future.

Limitations of a Domestic Network: Case Study Eftpos Australia

Analyst Insight by Kendrick Sands, Analyst - Consumer Finance, Euromonitor International

Australia’s domestic debit card network Eftpos has been trying to reinvent itself to compete with the international operators since 2009 to stop its declining share of card payments. By total debit card payment value, Eftpos total share of transactions declined from 83% in 2005 to 77% in 2011.  Australia generated US$446 billion in total card payments in 2012, making it the 9th largest market globally. In 2009 the Australia's leading card issuers and merchants formed “Eftpos Payments Australia Ltd (ePal)” to manage and promote the limited domestic Eftpos system.  Whether the network can compete with the more widely known international operators will depend on its ability to establish online and international card acceptance over the forecast period.

Despite Higher Demand for Toys, Global Toymakers yet to Convert Market Growth into Actual Sales in Emerging Markets

Analyst Insight by Utku Tansel, Head of Toys and Games Research, Euromonitor International

As it was highlighted in our new global briefing, "Corporate Strategies in Emerging Toy Markets," Latin America may be the talking point for Mattel, and LEGO is doing well in Eastern Europe; nevertheless, emerging markets, in particular Asia Pacific, have yet to reveal their true potential for multinational toy manufacturers.

Global toys growth is shifting towards emerging markets, and this trend is expected to continue

Emerging markets have become more important across all industries, and the shift is especially pronounced in traditional toys. Between 2006 and 2011, growth in developed countries averaged 1%, while emerging countries registered 13% average annual growth, driving the global toys sales.

Global Population Under the Age of 30 Centered in Emerging Markets

Half the global population is under the age of 30 although proportions are declining worldwide. Disparities are evident across regions with 90% of the world population under the age of 30 concentrated in emerging countries. Africa and the Middle East has the highest proportion, while advanced economies, which are ageing rapidly, have smaller youth ratios. Children and young people are an important consumer segment and indicate future labour market development.

Global Alcoholic Drinks Performance in 2012

Alcoholic drinks volume growth in 2012 was again driven by emerging markets, predominantly China given the overall size of the market. Europe remains challenging faced with maturity and macroeconomic difficulties, whilst the return to growth of the US offers encouragement. Even in declining markets opportunities exist for well-executed products, with cider and RTDs performing well on the back of innovation and new product launches.

Emerging Markets Resist Unemployment Increases Better Than Developed Economies

Unemployment is a ‘lagging indicator’ meaning that it can take some time for the impact of an economic downturn to trigger a rise in unemployment rates. Long term unemployment can dent consumer confidence and consumer spending. Spain and Greece had the world’s biggest percentage point increase in unemployment rates from 2007-2012, rising by 16.8 and 16.1 percentage points respectively. Many emerging markets in Asia and Latin America were more resilient and saw little to no increase.

New Home and Garden Data Now Live

New Home and Garden data shows 2012 was another difficult year for the industry in several Eurozone countries. Nevertheless, the US and Germany remained resilient and posted positive growth. The US also remains the largest market in the world, with a fifth of all sales. Performance in several emerging markets was also positive, from China to Russia and Indonesia, with double-digit growth.

Top Three Trends in Social Media for 2013

Analyst Insight by Pavel Marceux, Analyst - Technology, Communications and Media, Euromonitor International

Euromonitor International has identified three key global trends in Social Media for 2013. Social media is set for another year of transformation as market forces push greater crossover into other sub-segments and consumers demand wider availability of technical services. Top three social media trends: 1) The evolution of social networking platforms into a full-cycle offering of commercialised retailing and advertising solutions is set to continue. 2) The greatest user expansion will occur in communication-hungry emerging markets such as India and Indonesia. 3) Social media brands will focus much more on developing and integrating new content in an increasingly competitive and feature-driven environment.

Australia - A Resource Economy in Need of a New Direction?

Australia has avoided the stagnant economic growth familiar across advanced economies, chiefly due to its mining sector – which has been a beneficiary of Chinese economic growth. Its economy grew by 10.4% in real terms between 2008 and 2012, compared to 1.6% in the G7. Australia has vast amounts of natural resources but the industry is hampered by high costs – including the Mineral Resource Rent Tax (MRRT). The outlook is for slower growth, both in the mining sector and the economy as a whole.