Real growth, people and income

Real versus nominal

A nominal figure is measured in the money of the day. A real figure removes the effect of price changes, so it shows how much more (or less) was actually sold or produced. If a shop sells the same 100 loaves this year as last year, but bread costs 10 percent more, its nominal sales are up 10 percent and its real sales are flat. The exact formula is: real growth = (1 + nominal growth) / (1 + inflation), minus 1. When both numbers are small, nominal growth minus inflation is a good shortcut. When inflation is high, use the exact formula, because the shortcut goes wrong.

The same logic applies to whole economies. The IMF reports real GDP growth (volumes) and GDP in US dollars (values), and the two can tell very different stories. India's real growth for fiscal year 2025 to 2026 was 7.6 percent in the IMF's April 2026 database (7.7 percent in its July update), yet its GDP measured in US dollars grew only about 4.1 percent, from USD 3,761 billion to USD 3,916 billion, because prices and the rupee's exchange rate also moved. For a company planning in dollars, both numbers matter: real growth tells you about demand, the dollar figure tells you what that demand is worth to you.

People: the demand behind every market

Four questions about people decide most consumer markets. How many are there? How old are they? Where do they live (cities or the countryside)? What can they spend, and how evenly is income spread? The table compares ten economies on age and cities, using World Bank figures for 2025.

Age shapes what people buy. In Nigeria about 40.5 percent of people are under 15, so school supplies and baby products are big markets today, and first jobs and first homes will be tomorrow. In Japan 30 percent are 65 or older, so healthcare, care services and products for older people grow while the workforce shrinks. Births tell you what comes next: in 2024 the World Bank recorded 4.38 births per woman in Nigeria, 1.96 in India, 1.15 in Japan and 1.01 in China. A rate of about 2.1 keeps a population stable over time without migration; well below that, the population eventually shrinks. China's population fell by 3.39 million in 2025, to 1,404.89 million, according to its statistics office.

Cities matter because city dwellers buy differently: more packaged food, more modern shops and online orders, more services. India was 35.7 percent urban in 2025 by the World Bank's measure, so most of its people still live in villages and small towns, which shapes how goods reach them. Be careful with definitions: the World Bank puts China at 66.3 percent urban, while China's own statistics office reports 67.89 percent of permanent residents living in urban areas at the end of 2025. Use one source for a comparison and say which.

Income: average, median and spread

GDP per person is a quick measure of how rich a country is, but it is not what a household takes home. For spending power, look for household income or spending surveys from the national statistics office. Two more ideas help. The average (mean) income is pulled up by a few very rich households; the median is the income of the household in the middle, so it describes a typical household better. In China in 2025, disposable income per person (income after tax and transfers) averaged 43,377 yuan, but the median was 36,231 yuan. Urban residents averaged 56,502 yuan against 24,456 yuan for rural residents, more than twice as much. In the United States, the Census Bureau put median household income at USD 87,460 for 2025.

Spread is measured by the Gini index, from 0 (everyone has the same income) to 100 (one person has everything). In the World Bank's latest data it is 54.1 for South Africa (2022), 50.3 for Brazil (2024), 41.8 for the United States (2024) and 33.7 for Germany (2022). In a very unequal market there may be a sizeable group of rich buyers for premium goods next to a mass market that needs very low prices, and little in between. Some countries, India among them, measure the spread of spending rather than income, which gives lower numbers (India's latest is 25.5, for 2022), so only compare like with like. "Middle class" has no single official definition: if a case needs its size, define an income band in the local currency and take the share of households inside it from the national household survey.