The Long-Term Challenges Affecting the Global Economy
As the global economy continues its bumpy road to recovery following the financial crisis, new economic challenges are emerging or are coming into sharp relief:
- A slowdown in emerging markets – with China’s slowdown at the forefront of risks.
Real GDP Growth in Emerging and Developing Economies: 1980s-2020s
Source: Euromonitor International from national statistics/IMF/OECD/Eurostat
- Increasing globalisation and the interdependence of economies. The slowdown in China and the rebalancing of the economy away from resource-intensive industries has had knock-on effects across Asia, Africa, Latin America and Australia.
- Productivity gains have become a key challenge and will continue to be so. Of 111 countries for which we have data, only 23 have seen stronger productivity growth post-recession than pre-recession.
Real Growth in Productivity Pre- and Post-recession
Source: Euromonitor International from International Labour Organisation (ILO)/Eurostat/national statistics
- The increasing need for skilled labour across both developed and emerging economies is leading to widening income inequality between the haves and the have-nots. 66 of the 85 economies which we track will see an increase in income inequality between 2015 and 2030. Education is a key differentiator. We can see how this plays out in India, where the incomes of the highest-earning 10% of households really drive income growth in the country.
Real Growth in Disposable Income by Decile in India 2015-2030
Source: Euromonitor International from national statistics/IMF/OECD
Tangible impact on consumer behaviour
These economic challenges have a real and profound impact on consumer behaviour and spending. They form the economic backdrop to the emergence of the New Consumerism. The New Consumerism sees today’s consumers reassessing their priorities and increasingly asking themselves what they truly value. It embraces a host of major consumer trends: from the sharing economy to the preference given to experience over possessions, to frugal innovation and growing interest in the circular economy.
Read more on the New Consumerism and its implications for business in our new global report: The New Consumerism: Redefining Ownership, Values and Priorities.