US, APAC to drive rise in government spending
By 2020 global government spending will reach US$35 trillion against US$28 trillion in 2015, according to business information group MarketLine.
By 2020 global government spending will reach US$35 trillion against US$28 trillion in 2015, according to business information group MarketLine.
Global government spending will grow from US$28 trillion in 2015 to hit US$35 trillion by 2020, registering a compound annual growth rate (CAGR) of 2.5%, forecasts research firm MarketLine.
The company’s newly-published report, Government Spending Global Industry Guide 2016, predicts that growth will primarily be driven by the Asia-Pacific (APAC) region and the US, with CAGRs of 6.5% and 5%, respectively, during the forecast period.
“Strong growth has been felt in some of the key markets in this sector, primarily the US, China, and Germany,” said Kate Moody, analyst for MarketLine. “APAC will be the primary driver of global growth in the 2015-20 period, with a projected CAGR of 6.5%, in comparison to the slow CAGR of 1.7% expected in Europe.
“In APAC, China will continue to be a major driver of growth, posting double-digit growth throughout the period. Outside of APAC, the other large driver of growth will be the US, with a CAGR of 5% during the forecast period.”
The report also states that global segment growth differences have been pronounced, with the education segment having grown by over 46% between 2010 and 2015, while the defence segment grew by just 10%.
The largest segment in 2015 was social protection, which was primarily driven by strong spending in this area in Europe. Social protection spending accounted for just over a third of total government spending in Europe in 2015, compared to a little over 20% in the US.
“Comparing spending breakdowns between countries and regions offers some distinct differences and priorities,” adds Moody.
For example, the US alone accounts for over a third of global spending on defence, which comprises 9% of its overall spending. This is much higher than in Europe, for example, where defence spending is on average just 3.8% of total government spending.”
The report also states that all four segments – social protection, education, defence and healthcare – saw triple-digit growth over the 2010-15 period across APAC, with growth in education particularly strong in this region.