Consumption Is Real

In FY 2010-11 the share of consumer credit in total bank credit was only 19%. By FY2023-24 this increased to around 33%. Nearly half of this credit is unsecured or quasi-secured (secured against weak collateral), which makes it riskier. In the post-pandemic period, much of the growth in bank credit has in fact been driven by growth in consumer lend

while goods are consumed, services are experienced.

Taken together, the twenty-four commodities increased in total weight by 63 percent, or 7 percent a year. For the entire goods sector, which includes more of what business purchases, the total increase over the period was 28 percent, or approximately 3.1 percent annually. The growth in domestic production was in addition to these increases.

Right now, there are two important policy changes that have come out in 2025. The first is DOGE aimed at eliminating waste, fraud and abuse in the government. The second is tariffs aimed at making global trade more fair

Which matters more?

The chart today looks at each in terms of their size relative to the GDP of the US. The scales are different to

personal consumption amounts to only about 35 percent of China’s economy—roughly half the level in the United States.