World Data Lab: India to account for 16% of global consumption by 2050

According to a recent report published by the World Data Lab, India is projected to account for 16 % of global consumption on the basis of purchasing power parity by 2050. 

In 2050 ,India is projected to be just behind North America in the  global consumption share. North America is projected to have a global consumption share of 17 % in 2050.

The report titled “Dependency and Depopulation: Confronting the Consequences of New Demographic Reality” was released by  World Data Lab recently.

Purchasing Power Parity refers to the rate of currency conversion that makes the purchasing power of different currencies equal by eliminating the price difference between the countries due to different inflation rates.

Reason  for increase in Global Share of India

According to the World Data Lab report the share of India in the global consumption In 1997 was 4 % which later increased to 9 percent in 2023. It is expected to increase to 16 % in 2050.

Some of the reason mentioned y the report for the increase in India’s share of global consumption are as follows;

Decline in Support Ratio

• The Support Ratio in India is expected to drop to 4.8  in 2050  and further to 1.9 by 2100 from 9.8 in 2023.
• The Support Ratio or the Old age dependency ratio refers to the number of  working age people (15-64 years) for every person above 65 years whom they have to support.
• Thus a support ratio of 9.8 means that for every 9.8 old age person in the country there are 100 working age people. 
• A decline in support ratio indicates an increase in the working age population which is likely to boost consumption in the economy.

Share in world population to decline 

According to the World Data Lab , the share of Indian population in the world population is expected to decline from 23 % in 2023 to 17% in 2050. It is expected to further decline to 15 % by 2100.

India has already achieved the replacement fertility rate. The replacement fertility rate refers to the average number of children a  woman must have to keep the population growth stable. The replacement fertility rate or the total fertility rate is 2.1 children per woman.

Increase in Demographic Dividend 

• The report states that between 1997 to 2023, the demographic dividend added  0.7 per cent on average to the country’s gross domestic product (GDP) per capita growth. 
• Demographic dividend refers to the increase in GDP per capita growth due to increase in the working age population in the country.

Focus on Women participation in workforce

• The report advocates greater participation of the women in the country’s labour force.
• It says that the Indian GDP per capita will increase by 4-5% if the women labour force increases by 10 %.

Other Main Points of the Report 

Following are the other main points of the World Data Lab report.

• In the next 25 years,the later wave countries and regions will account for more than half of the global consumption, due to the fast-growing young population and increasing incomes.
• Later waves countries refers to those countries of emerging Asia, Latin America and the Caribbean, West Asia and North Africa, India, and Sub-Saharan Africa where the rate in fall of the fertility rates was later than the first wave countries and regions.
• The First wave region/countries includes the advanced or developed countries of advanced Asia, North America, Greater China, Western Europe, and Central and Eastern Europe  which first experienced a sharp fall in fertility rates.
• The report expects the share of the first wave region/countries in the global consumption will decline from 60 per cent in 1997 to 30 % by 2050.

About World Data Lab 

The World Data Lab was set up by former World Bank economist Wolfgang Fengler and Homi Kharas in 2014.

World Data Lab employs advanced data science methodologies to forecast consumer trends, category spending, demographic shifts, and cities. 

Headquarters: Vienna, Austria