US and EU dominate global consumption

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Interesting new research from Prof Nouriel Roubini provides some perspective on relative levels of consumer spending around the world:

• US private consumption accounted for 16% of total global output in 2008
• It was valued at $10trn, just ahead of European consumption at $9trn
• Total Asian consumption was under $5trn
• China’s consumption was $1.6trn, about equal to the UK
• India’s consumption was 56% of its GDP, China’s was only 38%

These numbers highlight the fact that Asian economies have been over-focused on supplying exports to the West, rather than domestic needs.

This means, as Deutsche Bank’s Markus Jaeger notes, that Asian domestic demand can “only partly offset the likely permanent reduction in foreign demand“. And Jaeger adds that even fast Asian domestic growth can provide “little support for G7 and global demand“.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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