India may account for 16% of global consumption by 2050: World Data Lab
- IBEF
- January 21, 2025
India is set to see a substantial rise in global consumption, projected to account for 16% of worldwide consumption at purchasing power parity (PPP) by 2050, up from 4% in 1997 and 9% in 2023, as per an analysis by McKinsey Global Institute in their recent report, "Dependency and Depopulation: Confronting the Consequences of New Demographic Reality." By 2050, only North America will surpass India, with a projected 17% share of global consumption. The increase is largely attributed to India’s young, growing population and rising incomes, with emerging regions such as Latin America, the Caribbean, Sub-Saharan Africa, and India contributing to more than half of global consumption in the next 25 years.
The research highlights a major demographic shift, as fertility rates fall in first-wave regions, resulting in an ageing population. By 2050, only 26% of the global population will reside in these regions, down from 42% in 1997, with the remainder in later-wave regions. This shift is expected to drive labour towards emerging markets, where India will play a significant role. In 2050 India’s labour force will contribute two-thirds of global working hours. India’s working-age population and support ratio are also projected to evolve significantly, with the support ratio expected to decrease by half by 2050, reflecting an ageing population similar to that of Japan today. Despite this, India's demographic dividend has contributed an average of 0.7% to its GDP per capita growth since 1997, and increasing female workforce participation could potentially boost GDP per capita by 4-5%, highlighting the vast potential for further economic growth.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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