LONDON–A new study on recent global cash demand shows that cash demand is increasing more than three times faster than worldwide economic growth rates.
The study from the ATM Industry Association looked at year-on-year growth in currency in circulation in a range of 30 countries in advanced and developing economies over a five-year period from 2009-2013.
“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%, compared to anemic economic growth rates below 3%,” said Mike Lee, CEO of ATMIA and author of the report.
According to ATMIA, the yearly changes in currency in circulation were recorded from annual reports and financial statements of the central banks in these 30 countries and then averaged out for the five-year period. Finally, the results were compared to the World Bank’s figures for current and future forecasted economic growth.
“The take-away numbers from the study are 8.9% global growth in cash in circulation, compared to 4.5% in the Eurosystem and 11% in the BRICS nations, which have 40% of the world’s population and produce 20% 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%, Russia -13.8%, India - 14.4%, China - 4.6% and South Africa at 10.2%, with an overall average for these important emerging economies at 11%. Currency in circulation grew at 6% during this period in the United Kingdom and 7.5% in the United States, which currently produces just under 25 million banknotes every day.
In the meantime, global economic growth in 2014 stood at 2.6%, marginally up from 2.5% in 2013, ATMIA said.
“Since the World Bank believes international economic growth will reach 3% this year and average at around 3.3% up to 2017, we can be very pleased that our 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.”