Economic Growth

The state of world prosperity: 4 key data points you need to understand

While prosperity is less prevalent than many think, the number of people around the world living well is rising, hitting the key metric of $25 a day.

While prosperity is less prevalent than many think, the number of people around the world living well is rising, hitting the key metric of $25 a day. Image: REUTERS/Francis Mascarenhas

Wolfgang Fengler
CEO and Co-Founder , World Data Lab
Homi Kharas
Co-Founder, World Data Lab; Senior Fellow, Brookings Institution
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  • In June 2023, the World Bank established a $25 a day threshold for prosperity.
  • Most people around the world do not meet that threshold — but the data is moving in the right direction.
  • Here are four key data points we all need to understand about the state of world prosperity.

Everyone wants to live in prosperity, with enough money not just to afford essentials — such as food, shelter and clothes — but also the goods and services associated with living the good life: a fridge, a motorcycle, a visit to the hair salon and to travel occasionally.

In 1990, in what was a milestone moment, the World Bank defined a global extreme poverty line set at per capita consumption of $1 a day. Today, using 2017 prices and adjusting for purchasing power differences across countries, this represents $2.15 a day.

Ending poverty was the World Bank’s main mission since the 1990s until it defined its “twin goals” in 2013, adding “shared prosperity” as its second objective. Shared prosperity involved making sure that the income growth rate of the bottom 40% of each country was at least as much as the average. In June 2023, the World Bank refined its shared prosperity target and established a $ 25-a-day threshold.

At $25 a day (in PPP) — or $9,125 a year — a person would already live a typical middle-class life, where we defined the entry-level at $12 a day (in PPP).

Here’s what you need to know about the state of prosperity today — and why that $25 per day threshold is so important.

Have you read?

The data points

World Data Lab provides the most up-to-date estimates for the state of global prosperity. Four facts especially merit attention.

1. The world is not a prosperous place

Using World Data Lab’s consumption projection model—which accounts for 25% of “missing spending” and aligns it with the income distribution—we estimate that there are currently 2.4 billion people living at or above $25 a day. This is less than a third of the global population. It is also higher than the World Bank's current estimates because the World Bank's latest estimates were made five years ago and don't account for "missing spending". These adjustments make an especially big difference for India.

2. The world is becoming more prosperous fast

The number of people living in prosperity is growing by about 85 million every year. That is three people every second. But because the global population also grows by about 70 million each year, the reduction in people living below the “prosperity line” is only around 15 million per year. However, since reaching a peak during COVID at 5.7 billion people, we project a continuous decline in the “non-prosperous”. If current trends continue, the world will experience a tipping point in 2049 when the prosperous will outnumber the non-prosperous for the first time (see below).

The prosperous are rising fast – but from a low base.
The prosperous are rising fast – but from a low base. Image: World Data Lab

3. There are more people living in prosperity in emerging economies than in the OECD

The crossover in numbers happened in 2021, but the prosperous population in emerging markets will outspend the well-off in the OECD only after 2033. These shifts are also apparent in how business activity has shifted, where major global brands come from emerging markets and leading Western brands — think Tesla or L’OREAL — now depend on Asia for their growth. Still, today only 20% of people in emerging markets can live a prosperous life, compared to 82% in the OECD.

Since 2021, there are more prosperous in emerging markets than in the OECD.
Since 2021, there are more prosperous in emerging markets than in the OECD. Image: World Data Lab
After 2033, the prosperous in emerging markets will outspend the OECD.
After 2033, the prosperous in emerging markets will outspend the OECD. Image: World Data Lab

4. Spending patterns between the prosperous and non-prosperous differ, and these differences may be growing

Poor people spend more on essentials such as food, shelter and clothing, while the better-off spend much more in modern markets, buying durables such as refrigerators, washing machines, motorcycles and all the associated services. The well-off also spend much more on travel and eating out. Though the better-off also buy more expensive food, housing and clothes, their share of these essentials is shrinking. World Data Lab’s consumption projection model projects that at $25/day, a typical person spends around $13.50 on essentials, such as food ($6.80), housing ($5.40) and clothes ($1.40), while $11.50 is left for discretionary spending (see figure 4).

At $25/day, discretionary spending is becoming significant.
At $25/day, discretionary spending is becoming significant. Image: World Data Lab

The road to world prosperity is still long, and it will take at least one generation, around 25 years before half the world can live a prosperous life. However, the fact that we are seeing rapid progress during times of global turmoil shows, once again, that trendlines beat headlines.

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