- Despite the turmoil, global consumption continues to grow, with more than 100 million new people expected to join the “consumer class” by 2025.
- The World Data Lab’s 7th edition of the World Consumer Outlook analyzes three economic scenarios with different outcomes depending on policy choices and cooperation .
- Purchasing power remains concentrated and shifting, and future growth will depend more on emerging markets as well as older, more affluent individuals.
Ten years ago, customs at Bogota’s El Dorado Airport, Colombia’s gateway, was very smooth. There was hardly anyone there, so you could arrive an hour before your flight without any problems. Now, the airport is bustling with tourists and families buying plane tickets for the first time, creating a typical international airport experience. It’s best to arrive at El Dorado Airport three hours in advance.
The change is evident in the numbers: in 2009, Colombia carried 24.5 million international passengers, but by 2024, this number is projected to reach a record high of 56.5 million.
The reason for this increase is simple, yet gradual, and easily overlooked by the media: According to findings from the 7th edition of the World Consumer Outlook by UK research firm World Data Lab, Colombia’s consumer population grew by 13 million people over the same period, which likely contributed to the increase in airport traffic.
The report details the latest forecasts for consumer spending from 2025 to 2030.
As people emerge from poverty and join the consumer class, their spending habits change. They no longer seek only necessities, but also consider luxuries like air travel, televisions, or even their first car. What’s happening quietly and slowly in places like Colombia is happening all over the world.
In 2025, the World Data Lab predicts that 106 million people will join the “consumer population,” defined as “people who spend more than $13 per day (2021 purchasing power parity),” and consisting of the middle and wealthy classes.
However, inflation, war, and trade conditions have affected that number, resulting in 10 million fewer new consumers than originally projected.
Despite these global challenges, long-term trends show further progress: the middle and wealthy now number 4.4 billion, outnumbering the poor by 3.6 billion, and together consuming more than $60 trillion a year.
Although 2025 will be the slowest year for consumer growth since the COVID-19 pandemic, the global middle class is projected to surpass 4 billion people for the first time, accounting for more than half of the population. This trend is expected to continue, with another 1 billion people joining the middle class over the next decade, bringing the global population of 8.7 billion to 5.7 billion consumers.
Remember, “trends speak louder than headlines.” This means that while news tends to focus on short-term changes, long-term growth trends are fundamentally more important in business. Global economic growth is slowing, but not stagnating. The report estimates that household spending will be $1 trillion less than expected this year, but will still increase by $2 trillion nominally. Taking inflation into account, this equates to real growth of $1.4 trillion (an average of $175 per person per year).
However, the reality is that turmoil in the global economy is impacting consumer spending, with the World Bank predicting the slowest growth in 17 years. The report examines various scenarios based on geographic consumption patterns and reveals a “global prisoner’s dilemma” in which each country acts in its own interest, resulting in suboptimal outcomes for the overall economy.
If the US, EU, and China cooperate by easing tariffs and policies, more than 35 million people could join the middle class by 2027. On the other hand, if these countries raise barriers, tighten policies, and abandon cooperation, the global economy will falter, and 25 million people who would have joined the middle class will remain poor, particularly in the industrialized US and export-dependent China. Cooperation benefits everyone, but withdrawal harms everyone. This is the “global prisoner’s dilemma.” Specifically, the following three scenarios were analyzed:
- Scenario A (Slower Growth): Global borrowing costs and risk premiums rise, the US extends tax cuts, other countries do not make significant reforms, and a fierce tariff war between the US and China leads to significant tariff increases.
- Scenario B (Baseline): The US and EU cut policy rates, Japan tightens fiscal spending, the US and emerging markets increase debt, EU debt ratios rise, and trade policy uncertainty remains elevated.
- Scenario C (Reform): Financial conditions improve as confidence rises. The United States reforms to reduce debt, the EU increases public investment, and China opens its markets and restructures state-owned enterprises to reduce barriers to entry.
US consumers would be hit hardest in Scenario A. High interest rates and the trade war would squeeze purchasing power, particularly affecting the middle class. Even in the upside-down case, Scenario C, the gains for the middle class would be limited. Fiscal tightening and tax increases would curb growth, especially affecting the non-wealthy.
For China, two scenarios, A and C, have very different outcomes. In the downside scenario, Scenario A, Chinese consumers are hurt, with the middle class particularly hit hard by declining exports and a weaker currency. In Scenario C, a stronger currency, increased investment, and lower interest rates support small businesses and expand China’s middle class.
Europe is similarly hit in Scenario A by its heavy reliance on global trade, particularly the US, while in the more favourable Scenario C, public investment and infrastructure projects would help restore consumer confidence and support the economy.
The competitive landscape is changing
Slowing growth does not mean the end of global consumption opportunities, as the global middle class is expected to grow by more than 100 million people by 2025. However, it does mean that the playing field is changing.
Spending will be driven more by inflation, currency fluctuations, trade policy, financial stability and the status of the wealthy older generation than by fast-growing new markets.
The United States remains at the center of the global consumption landscape but is also most exposed to downside risks, while Europe could gain ground with the right policy choices, and in China, it all depends on the timing of reform and stabilization.
