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Chart of the Week

Prices Are Skyrocketing, But Only For Things You Actually Need

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Chart: Prices Are Skyrocketing, But Only For Things You Actually Need

Prices Skyrocketing, But Only For Things You Actually Need

Everything else has fallen in price over the years

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

The way that economic data is presented, we often think of inflation as a singular number representing a general increase in prices.

For example, it might be reported that nominal GDP growth was 3%, and that inflation was 2%. Since the inflation represents a rise in price levels, we subtract it from the nominal rate to get a real GDP growth of 1%.

But in reality, price changes do not affect products and services in such a uniform and simple fashion. In the above example, all goods aren’t increasing in price at a 2% rate – that’s just an average. What really happens is that there is a full spectrum of price changes: some goods end up falling in price, while other goods get more expensive.

What’s Actually Getting More Expensive?

This week’s chart looks at the change in prices of consumer goods since 1996, using data provided by Mark J. Perry of AEI’s Carpe Diem blog.

Here’s his original chart, which is also very telling:

Price changes from 1996 to 2016

The average price increase, as shown by the CPI (Consumer Price Index), is 55% over the last 20 years. Meanwhile, the prices of individual sub-categories have a much wider variance.

The good news is that the price of technology is generally getting cheaper. Software, TVs, wireless, and new cars have all come down in price relative to the CPI. Clothing, toys, and furniture are also way more affordable than they were 20 years ago.

The bad news? Most of the above items are not the ones that really matter to most of us. The things we actually need to live healthy and fruitful lives – education, food, healthcare, childcare, and housing – are all skyrocketing in cost.

Tuition costs have soared 197%. Textbooks have more than tripled in price, going up 207% since 1996.

Taking care of our loved ones is more expensive. Healthcare and childcare costs have risen almost as much: 105% and 122% respectively.

Meanwhile, basic necessities such as shelter and food have increased at rates higher than the CPI as well. Housing costs are 61% higher and food is 64% more expensive.

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Chart of the Week

The Economies Adding the Most to Global Growth in 2019

Global economics is effectively a numbers game – here are the countries and regions projected to contribute the most to global growth in 2019.

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The Economies Adding the Most to Global Growth in 2019

Global economics is effectively a numbers game.

As long as the data adds up to economic expansion on a worldwide level, it’s easy to keep the status quo rolling. Companies can shift resources to the growing segments, and investors can put capital where it can go to work.

At the end of the day, growth cures everything – it’s only when it dries up that things get hairy.

Breaking Down Global Growth in 2019

Today’s chart uses data from Standard Chartered and the IMF to break down where economic growth is happening in 2019 using purchasing power parity (PPP) terms. Further, it also compares the share of the global GDP pie taken by key countries and regions over time.

Let’s start by looking at where global growth is forecasted to occur in 2019:

Country or RegionShare of Global GDP Growth (PPP) in 2019F
China33%
Other Asia (Excl. China/Japan)29%
United States11%
Middle East & North Africa4%
Euro Area4%
Latin America & Caribbean3%
Other Europe3%
Sub-Saharan Africa2%
Japan1%
United Kingdom1%
Canada1%
Rest of World8%

The data here mimics some of the previous estimates we’ve seen from Standard Chartered, such as this chart which projects the largest economies in 2030.

Asia as a whole will account for 63% of all global GDP growth (PPP) this year, with the lion’s share going to China. Countries like India and Indonesia will contribute to the “Other Asia” share, and Japan will only contribute 1% to the global growth total.

In terms of developed economies, the U.S. will lead the pack (11%) in contributing to global growth. Europe will add 8% between its various sub-regions, and Canada will add 1%.

Share of Global Economy Over Time

Based on the above projections, we were interested in taking a look at how each region or country’s share of global GDP (PPP) has changed over recent decades.

This time, we used IMF projections from its data mapper tool to loosely approximate the regions above, though there are some minor differences in how the data is organized.

Country or RegionShare of GDP (PPP, 1980)Share of GDP (PPP, 2019F)Change
Developing Asia8.9%34.1%+25.2 pp
European Union29.9%16.0%-13.9 pp
United States21.6%15.0%-6.6 pp
Latin America & Caribbean12.2%7.4%-4.8 pp
Middle East & North Africa8.6%6.5%-2.1 pp
Sub-Saharan Africa2.4%3.0%+0.6 pp

In the past 40 years or so, Developing Asia has increased its share of the global economy (in PPP terms) from 8.9% to an estimated 34.1% today. This dominant region includes China, India, and other fast-growing economies.

The European Union and the United States combined for 51.5% of global productivity in 1980, but they now account for 31% of the total economic mix. Similarly, the Latin America and MENA regions are seeing similar decreases in their share of the economic pie.

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Chart of the Week

Map: Cities With the Most Ultra-Rich Residents

What cities are the world’s ultra-rich flocking to? This map looks at ultra high net worth individual (UHNWI) growth rates in cities around the world.

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Mapped: The Cities With the Most Ultra-Rich Residents

As of 2018, there is a grand total of 198,342 ultra high net worth individuals (UHNWIs) globally with assets over US$30 million, according to the most recent edition of Knight Frank’s Wealth Report.

Although these millionaires and billionaires can be found all over the globe, the reality is that most of the world’s ultra-rich population tends to congregate in world-class cities.

Generally speaking, UHNWIs are looking to live in places that are conducive to safeguarding and growing their wealth, but that also give them access to top-end amenities that allow them to live comfortably and luxuriously.

Top 10 Cities for the Ultra-Rich

To start, we’ll look at a list of global cities, organized by expected number of UHNWIs in 2023:

RankCityUHNWIs (2018)UHNWIs (2023e)Change (%)
#1🇬🇧 London4,9446,01521.7%
#2🇸🇬 Singapore3,5984,39322.1%
#3🇯🇵 Tokyo3,7324,12510.5%
#4🇺🇸 New York City3,3783,89115.2%
#5🇨🇳 Beijing1,6732,24734.3%
#6🇫🇷 Paris1,6672,03121.8%
#7🇰🇷 Seoul1,5942,02026.7%
#8🇹🇼 Taipei1,5191,86422.7%
#9🇨🇭 Zurich1,5071,79619.2%
#10🇨🇳 Shanghai1,2631,69033.8%

London continues to top the list, with a roster of 4,944 ultra-rich residents today and the projected growth over the coming years to eclipse the 6,000 mark by 2023.

Tokyo has the second highest amount of UHNWIs today, but the city is adding them at a slower rate than other rival cities. As a result, Singapore will move into the #2 spot overall by 2023, with an expected total of 4,393 high net worth residents.

Finally, it’s worth noting that only two cities on the top 10 list are expected to see growth above a 30% clip over this five-year period. Shanghai and Beijing could be cities to watch for decades to come, as they add millionaires and billionaires at a faster rate than any of the other heavyweights.

Fastest Growing Cities

Where are the billionaire meccas of the future?

Here are the 10 cities that are expected to add UHNWIs the fastest between 2018-2023:

RankCityUHNWIs (2018)UHNWIs (2023e)Change (%)
#1🇮🇳 Mumbai7971,10138.1%
#2🇮🇳 Delhi21129137.9%
#3🇵🇭 Manila 11515736.5%
#4🇨🇳 Shenzhen52770834.3%
#5🇨🇳 Beijing1,6732,24734.3%
#6🇨🇳 Guangzhou39452934.3%
#7🇨🇳 Shanghai1,2631,69033.8%
#8🇮🇩 Jakarta40152931.9%
#9🇲🇾 Kuala Lumpur37649631.9%
#10🇰🇷 Seoul1,5942,02026.7%

Not surprisingly, all 10 of these cities are located in Asia.

Two Indian cities (Delhi and Mumbai) top the list, and are likely to add nearly 40% to their ultra-rich populations over the next five years. China also has a strong showing here.

Interestingly, just missing the above top 10 were a few non-Asian cities: Auckland (#11), Madrid (#12), Munich (#13), and Nairobi (#14) are all expected to grow their UHNWI populations by roughly 25% by 2023.

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