Euromonitor has predicted that by 2020 China will be the world’s largest economy and that young Chinese, who already account for 25% of the world’s luxury market, will drive household consumption.
A special report released July 7 by European statistical monitoring site; Euromonitor, predicts the world’s largest economies in 2020.
By 2020 China is expected to have overtaken the USA as the world’s largest economy with a predicted Gross Domestic Product (GDP) of US $28,124,970 million, the USA will be the second largest, India third and Japan fourth.
The rising importance of emerging markets such as India and China will have massive implications for global consumption and the environment. By 2020 Euromonitor estimates that the number of people in China with a disposable income above US $ 10,000 (€7,906 /67,772 RMB) will have quadrupled to 222 million households. This will drive household consumption as increasing numbers of people will be able to afford items such as luxury goods.
The report also indicates that young consumers will be the growing force behind household consumption; despite the fact that by 2012 China and India will have the world’s largest population of people aged 65 and over, young consumers make more frequent purchases of large items such as cars, houses and household appliances.
The luxury market in China already exceeds that of the USA according to statistics released by Chinese newspaper The People’s Daily in 2009. The paper reports that China’s luxury consumption accounts for 25% of the global market, and the World Luxury Association 2009-210 report revealed that Chinese consumers accounted for a quarter of Gucci group’s sales worldwide.
Other emerging markets such as India are expected to follow a similar pattern of consumer development.
Euromonitor predicts that the top ten largest economies by 2020 will be: