In 2020, for the first time in half a century, the global consumer class will shrink. Our models estimate that the global consumer class will still reach 5 billion people by 2027. This will make COVID-19 a temporary shock to the global economy and the global consumer class will recover in 2021. The average world citizen, however, will have lost two economic years.
Instead of adding $2 trillion in additional consumer spending, the world has been losing $3.3 trillion because of COVID-19, almost the equivalent of total consumer spending in Germany and France combined. The sharpest declines have been in Asia excluding China and Europe with about $1 trillion each. North America will decline by $770 billion, and South America will contract by $300 billion. China, on the other hand, sees a $200 billion increase in total consumer spending. With the pandemic, the shift towards emerging markets has gathered speed. Not all emerging markets are equal, though: China and Egypt will do better than India and Russia, which will do better than Brazil; consumers in Mexico and South Africa are likely to take more than five years to recover.
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