Consumption expenditure linked to exchange rates
Comparing Official exchange rate (LCU per US$, period average) with Final consumption expenditure (constant LCU), per unit of GDP across 168 countries, 2022–2025.
- Rank correlation
- +0.93
- Holding size constant
- +0.91
- Countries compared
- 168
- Period
- 2022–2025
What might link these
The strong correlation between final consumption expenditure and official exchange rates may be driven by economic factors such as trade balances or inflation rates. A careful reader should consider the potential impact of a likely confounder, such as a country's economic openness. The relationship could be influenced by various macroeconomic conditions.
Why this is not proof of anything
This is a correlation across countries, not an experiment. It cannot show that either indicator causes the other, and both may simply follow a third thing. This correlation could mislead by implying a direct causal link between consumption expenditure and exchange rates, when in fact the relationship may be mediated by other economic factors.
The second figure above repeats the measurement with national population and income held constant. It is the more conservative number: a relationship that largely disappears there was mostly telling you that larger, richer countries have more of most things.
How this was measured
Both indicators were ranked across every country reporting each, and the two rankings compared — ranks rather than raw values, because a handful of very large countries can otherwise manufacture a relationship on their own. The calculation is arithmetic over figures already published on this site; the commentary above is drafted from the two indicator names and the resulting coefficients.