News

Global cash demand outstrips economic growth, study shows

Cash in circulation worldwide grew at an average pace of 8.9 percent annually from 2009 through 2013, despite economic growth rates of less than 3 percent for the period.

June 22, 2015

The ATM Industry Association has published a study indicating that global cash demand is increasing more than three times faster than worldwide economic growth.

According to a press release from the industry trade group, the study looked at the growth of currency in circulation across 30 advanced and developing economies over a 5 year period from 2009 through 2013.

"The results of this far-reaching research paper show powerful rates of growth for cash in circulation right across the world, with an average year-on-year increase over this period of 8.9 percent, compared to anemic economic growth rates below 3 percent," said ATMIA CEO Mike Lee, a futurist and the author of the report.

The yearly changes in currency in circulation were culled from annual reports and financial statements of central banks in the 30 countries and then averaged out over the five-year period. Finally, results were compared to World Bank figures for current and forecasted economic growth.

"The takeaway numbers from the study are 8.9 percent global growth in cash in circulation, compared to 4.5 percent in the Euro-system and 11 percent in the BRICS nations, which have 40 percent of the world's population and produce 20 percent of gross world product," Lee said. "These results for cash demand are truly astonishing in our times of sluggish economic growth."

The figures for currency growth in BRICS were: Brazil, 12 percent; Russia, 13.8 percent; India, 14.4 percent; China, 4.6 percent; and South Africa, 10.2 percent. The overall average for these emerging economies was 11 percent.

During the period, currency in circulation grew at a rate of 6 percent in the United Kingdom, and 7.5 percent in the United States, which currently produces just under 25 million banknotes every day.

Global economic growth in 2014 stood at 2.6 percent, marginally up from 2.5 percent in 2013.

"Since the World Bank believes international economic growth will reach 3 percent this year and average at around 3.3 percent up to 2017, we can be very pleased that [the ATM] industry's most important asset, the global supply of cash, is underpinned by exceptionally robust demand from the human populations of the world," Lee concluded. "Cash growth is currently outstripping economic growth by a wide margin."

The new report forms part of ATMIA's new online Market Intelligence Library for its members in 65 countries.