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Global government spending reached $28 trillion in 2015 and will hit $35 trillion by 2020, says MarketLine
Global government spending will grow from $28 trillion in 2015 to hit $35 trillion in 2020, registering a Compound Annual Growth Rate (CAGR) of 2.5%, says research firm MarketLine.
The company’s report states 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.
Kate Moody, Analyst for MarketLine, says: “Strong growth has been felt in some of the key markets in this sector, primarily the US, China, and Germany. APAC will be the primary driver of global growth in the 2015-2020 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.”
MarketLine’s 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 defense 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.
Moody continues: “Comparing spending breakdowns between countries and regions offers some distinct differences and priorities. For example, the US alone accounts for over a third of global spending on defense, which comprises 9% of its overall spending. This is much higher than in Europe, for example, where defense spending is on average just 3.8% of total government spending.”
The report also states that all four segments – social protection, education, defense, and healthcare – saw triple-digit growth in the 2010-2015 period in APAC, although growth in education was strongest in this region.
– Information based on MarketLine’s report: Government Spending Global Industry Guide_2016.
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