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Private Consumption Gets the Virus. Heads to an ICU…

This is a syndicated repost published with the permission of True Economics. To view original, click here. Opinions herein are not those of the Wall Street Examiner or Lee Adler. Reposting does not imply endorsement. The information presented is for educational or entertainment purposes and is not individual investment advice.

Via @bkollmeyer, Deutsche Bank’s Research chart on discretionary spending across the global economy:

I have no access to the primary data on this, but if the chart is true, the global economy is ‘borked’.

One notable line here is for Ireland. Ireland’s economy is heavily dependent on personal consumption expenditure. Here are the latest data:

    PC as % of
modified
total
demand
        PC as %          of GNI*
     1995-1999 58.8 57.6
     2000-2007 54.7 55.2
2007 54.1 56.7
     2008-2014 62.8 63.8
     2015-2018 59.4 55.4
2019 58.7                NA

 

My estimate is that 2019 Personal Consumption to GNI* ratio was around 55.2%. If true, coupled with the above-cited DB research, Irish economy has taken a nosedive of around 4 percentage points for FY 2020 just on personal consumption side of economic activity. Investment and private sector production will be the other contributors to that decline.

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