In this piece, we will take a look at the 20 countries with the highest consumer spending in the world. If you want to skip our overview of how spending today is vastly different from conditions before the coronavirus pandemic, then you can skip ahead to the 5 Countries with the Highest Consumer Spending in the World.
The United States is a consumer driven economy. Each year, thousands of people wait for holidays like Black Friday to splurge, and retailers stock inventories in anticipation of mega shopping events such as the Holiday Season. As a result, the health of the American economy is tied to how much Americans spend, and in 2024, the environment is starkly different from what existed before the coronavirus pandemic.
Before the pandemic struck, credit was relatively easy to score and as a result, spending was as you’d expect it to be. However, in the immediate aftermath of COVID 19, spending in key areas such as accommodation was different in a way that few would have thought would be possible in December 2019. Research from the banking behemoth JPMorgan Chase & Co. (NYSE:JPM) shows that in the U.S., consumer spending for staples products was quite high after lock downs were enforced in March 2020. Spirits saw the highest jump, along with other products such as coffee and hand sanitizers also seeing greater interest. At the same time, spending on items such as cosmetics dropped as work from home requirements changed the nature of grooming for work.
Fast forward to 2024, analysts and economists are bracing themselves for the same set of jitters that they felt in mid and end 2022. These jitters are quite relevant to consumer spending as well. Mid April 2024 is seeing the stock market and the Federal Reserve deal with a set of inflation data that they would have preferred had painted a different picture instead. Data from the Labor Department show that the Consumer Price Index in the U.S. stood at 3.5% in April, for another set of figures that overshot estimates. As a result, stocks were sharply down, and Fed chairman Jerome Powell affirmed that higher rates would need to take longer to work their way through the economy to sustainably reduce inflation.
What does this mean for consumer spending? Well, apart from inflation, spending is influenced by the economic state and the labor market. On the latter front, U.S. economic growth has been robust; so much so that some estimates believe that despite higher interest rates than what most people would like, the economy can continue to grow in 2024 nevertheless. Some of the most optimistic estimates come from the International Monetary Fund (IMF), which now believes that the projected American GDP growth of 2.7% in 2024 will outpace all peer economies. The labor market is also doing well as it added more than three hundred thousand jobs in March and unemployment also dropped. Both these metrics mean that consumer spending should at least maintain the pace even though rates are high since people are finding work and are able to afford at least staples.
A report from U.S. Bancorp (NYSE:USB) ties these things to describe the state of U.S. consumer spending as of March 2024. It reveals that U.S. household debt, one of the metrics of consumer spending, is growing in line with wage growth. This indicates that the more consumers make, the more they spend and the fact that these levels are in balance should soothe economists in an otherwise uncertain environment. The report adds that while the data appears to be indicative of stability as of now, analysts need to be on the watchout for changes to the labor market and revolving credit levels – both of which can make consumers pull back.
As for global consumer spending, here’s what the consumer goods giant The Procter & Gamble Company (NYSE:PG) had to say during its latest earnings call:
In summary, North America, Europe focus Markets, Asia Pacific focus markets and Latin America, which combined represent three-quarters of company sales, delivered over 6% of organic sales growth in quarter two, with three points of volume growth and three points of price mix. These same markets grew 9% in quarter one with around two points of volume growth and seven points of price mix. Continued strong organic sales growth with accelerating volume growth to mitigate the anticipated annualization of pricing, consistent with our guidance. The balanced 25% of company sales including Greater China, Eastern Europe and Middle East Africa were impacted by local market issues we described. Quarter two organic sales for this group were down five points versus prior year.
We expect most of these effects in these regions to be temporary or annualizing, SK-II consumption is sequentially improving. We continue to expect China market growth to improve, and over time return to mid singles, and we expect market pressures in the Middle east and Turkey to ease over time.
So which countries are the biggest consumer spenders? Take a look below!
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Our Methodology
To make our list of the countries with the greatest consumer spending, we used the World Bank’s data for final consumption expenditure in 2022 in current U.S. dollar terms.
20 Countries with the Highest Consumer Spending in the World
20. Republic of Poland
Final Consumption Expenditure in 2022: $524 billion
The Republic of Poland is a sizeable European country with an $844 billion nominal GDP and a GDP per capita of $23,000. Apart from services, manufacturing and banking also play crucial roles in the Polish economy.
19. Republic of Turkiye
Final Consumption Expenditure in 2022: $625 billion
Turkiye is an Asian and European country that is one of the members of the group of sizeable global economies called the G20. The Turkish economy is worth $1.14 trillion, making it one of the biggest in the world.
18. Kingdom of Saudi Arabia
Final Consumption Expenditure in 2022: $627 billion
Saudi Arabia is a Middle Eastern nation that is the world’s largest supplier of crude oil. Oil funds the Saudi economy, with the main earnings coming through the dividends that the world’s biggest oil company, Saudi Aramco, pays its majority shareholder, the Saudi government.
17. The Netherlands
Final Consumption Expenditure in 2022: $686 billion
The Netherlands is the second European nation on our list of the world’s countries with the highest consumer spending. A former colonial power, it has well developed financial markets which were dealt a scare through a fire in the stock exchange in April 2024.
16. Republic of Indonesia
Final Consumption Expenditure in 2022: $800 billion
Indonesia is one of the most populous countries in the world courtesy of the 279 million people that live inside its borders. However, it ranks low on our list despite the sizeable population advantage.
15. Kingdom of Spain
Final Consumption Expenditure in 2022: $1 trillion
Spain is another former European colonial power. It has a $1.6 trillion economy, moderate levels of income equality, and high levels of human development.
14. Republic of Korea
Final Consumption Expenditure in 2022: $1.1 trillion
The Republic of Korea, or South Korea, is a prosperous Asian country. It has some of the biggest consumer facing businesses in the world, such as the electronics behemoth Samsung and car makers like Hyundai and Kia.
13. Commonwealth of Australia
Final Consumption Expenditure in 2022: $1.1 trillion
Australia is an oceanic country that is one of the largest in the world in terms of area but is also quite sparsely populated. It has a $1.7 trillion economy and a GDP per capita of $66,589.
12. United Mexican States
Final Consumption Expenditure in 2022: $1.1 trillion
Mexico is one of two countries that share a land border with the United States. This allows it to benefit from a close relationship with the American manufacturing industry. 2024 has seen its inflation undershoot expectations, opening up hopes for interest rate cuts.
11. Russian Federation
Final Consumption Expenditure in 2022: $1.4 trillion
Russia is the largest country in the world in terms of land mass. As its invasion of Ukraine enters a second year, analysts worry that government spending might be masking other Russian economic woes.
10. Federative Republic of Brazil
Final Consumption Expenditure in 2022: $1.5 trillion
Brazil is the most prosperous country in South America with a GDP of $2.3 trillion. However, a GDP per capital of $11,352 is quite low and belies high levels of income inequality.
9. Canada
Final Consumption Expenditure in 2022: $1.6 trillion
Canada is America’s second neighbor. Its proximity to America means that Canadians and Americans often have the same outlets and goods for consumer spending splurges.
8. Italian Federation
Final Consumption Expenditure in 2022: $1.61 trillion
Italy is a developed European country that is also a global political power. It has a $2.3 trillion GDP and a GDP per capita of $39,580.
7. French Republic
Final Consumption Expenditure in 2022: $2.1 trillion
France is one of the most prosperous countries in the world, and also one of the handful of countries with nuclear weapons. It has sizeable companies that operate in the construction, defense, and other crucial industries.
6. Republic of India
Final Consumption Expenditure in 2022: $2.4 trillion
India is the most populous country in the world. It is also one of the fastest growing economies in Asia, and recent statistics put the Indian economy at a cool $3.9 trillion.
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Disclosure. None. 20 Countries with the Highest Consumer Spending in the World was initially published on Insider Monkey.