Consumer Spending by Country 2024

Consumer spending is the total amount of money that an individual or household spends on products and services. It includes multiple components, based on whether the spending is affected by income. Consumer spending is a measure of a country's buying power, which is in turn a measure of that country's overall economy.

Components

The primary components of consumer spending include induced consumption and autonomous consumption.

Induced consumption is the consumption of products and services that changes when a consumer experiences a change in disposable income. These expenditures aren't generally considered essential for survival.

On the other hand, autonomous consumption, also known as exogenous consumption, is consumption that doesn't vary with changes in income. It still occurs even when the consumer has no income, such as a rent or mortgage payment. While an increase in income may cause a consumer to obtain more expensive housing, this expense is still considered autonomous. Autonomous consumption is considered a form of dissaving when the consumer's income is actually zero, because it must be financed by savings or borrowing. Unlike induced consumption, autonomous consumption doesn't systematically fluctuate with income.

HFCE

Household final consumption expenditure (HFCE) is a measure of income that represents consumer spending. It includes all the expenditures incurred by households on products and services, even when their cost isn't economically significant. It also includes imputed expenditures, such as the rent of services. For example, the rent of housing is usually a household's most important imputed expenditure.

HFCE includes all housing expenses, not just the most common ones like mortgage and rent payments. It also includes communal arrangements such as boarding houses, retirement homes, nursing homes and prisons.

The following data is from the World Bank showing the world's top ten consumer markets by country, as measured by HFCE. It shows the country, most recent year for which data is available and that country's HFCE in millions of US dollars:

In some countries, the HFCE may be larger than its entire economy, as measured by its Gross Domestic Product (GDP). This apparent impossibility generally indicates the country only has an informal economy, at least in terms of income.