The fall of consumption
WHAT
is the most important cmodity in the world? It’s not gold nor oil or even technology. The most important commodity in the world is actually demand. In economics, demand is defined COVID pandemic, and this fall has an as the desire for a particular good extremely negative effect. plus the means of purchasing that Even if we do find a cure for good, and is commonly used to track COVID, consumption will never be the amount of goods and services the same again because of one simple households consume. reason: demographics.
Thanks t o t he COVID- 19 East Asia and Europe have aging p a n d e mic, d e mand – a n d populations, while the rest of the therefore, consumption – all over world is not far behind. SouthEast the world is falling, and it’s going Asia and Latin America are headed to get worse. towards the same situation. Only
One of the best indicators for Africa has a growing population but consumption is gross domestic even they will eventually start to product or GDP (private consumption demographically decline, according + i nvestment + government to projections. spending + exports and imports). The US is the only country The Philippines’s GDP dropped by that still has stable consumption 16.5 percent in the Second Quarter demographics but i t’s l argely of 2020, the lowest recorded since artificial, and driven by immigration, 1981. to a great extent, unsustainable.
The US and other developed What COVID has done is that countries aren’t faring too well it has accelerated this trend. The either. According to the US Bureau world could still maintain stable of Economic Analysis, “the real GDP consumption demographics before for the nation decreased at an annual the pandemic, but it was already in rate of 31.4 percent, per statistics decline. released today.” What was happening back then
The point is that consumption all was kicking the can down the road, over the world has fallen due to the but the coronavirus stopped that. It has accelerated the effects of falling demographics.
Markets and trade routes will dry up as population continue to age. Economies will continue to rely on increasing amounts of debt to push consumption, but that is most likely temporary. You can’t have economic activity without people, and people are projected to decline.
For the past several centuries, the Western dominated paradigm relied on growing demographics to create trade and markets. As global demographics decline, the world economy will suffer a tremendous change./