Global Tractor Market Insights, Size, and Forecast By Power Output (Less than 50 HP, 50-100 HP, 101-150 HP, More than 150 HP), By Engine Type (Internal Combustion Engine, Electric, Hybrid), By Application (Farming, Construction, Landscaping, Forestry), By Tractor Type (Compact Tractors, Utility Tractors, Row Crop Tractors, 4WD Tractors), By Region (North America, Europe, Asia-Pacific, Latin America, Middle East and Africa), Key Companies, Competitive Analysis, Trends, and Projections for 2026-2035
Key Market Insights
Global Tractor Market is projected to grow from USD 115.4 Billion in 2025 to USD 178.6 Billion by 2035, reflecting a compound annual growth rate of 4.7% from 2026 through 2035. The global tractor market encompasses the manufacturing, distribution, and sale of various types of tractors, categorized by application, engine type, tractor type, and power output, primarily for agricultural and construction purposes. This growth is significantly driven by the escalating demand for food production globally, necessitating increased mechanization in farming to enhance efficiency and yield. Additionally, government initiatives supporting agricultural modernization in developing economies, coupled with a shrinking agricultural labor force in many regions, are propelling the adoption of advanced tractor technologies. The market is also benefiting from the rising popularity of precision farming techniques and the integration of IoT and AI into agricultural machinery, which promise optimized resource utilization and improved operational control. However, the market faces restraints such as the high initial investment cost of advanced tractors, particularly for small and medium-sized farmers, and the volatility in agricultural commodity prices impacting farmer incomes. The environmental regulations concerning engine emissions also pose a challenge, pushing manufacturers towards developing more sustainable but potentially costlier solutions.
Global Tractor Market Value (USD Billion) Analysis, 2025-2035
2025 - 2035
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A key trend shaping the market is the increasing focus on electric and autonomous tractors, driven by environmental concerns and the pursuit of operational efficiency. Manufacturers are heavily investing in R&D to develop these next-generation machines, which offer reduced emissions, lower operational costs, and the potential for 24/7 operation. Another prominent trend is the growing demand for compact and utility tractors, particularly in emerging markets and for specialized farming applications like horticulture and vineyards. These tractors offer versatility and maneuverability, catering to a diverse range of agricultural needs beyond large-scale field farming. Furthermore, the market is witnessing an uptick in demand for rental services for agricultural machinery, allowing smaller farmers to access advanced equipment without the burden of significant capital expenditure. This trend is fostering new business models and expanding the reach of advanced tractor technology. The dominant application segment, Farming, underscores the foundational role of tractors in global agriculture, reflecting the continuous need for robust and efficient machinery for cultivation, harvesting, and other farm operations.
Asia Pacific stands out as the dominant region in the global tractor market, primarily due to its vast agricultural lands, large farmer population, and government support for agricultural mechanization. This region is also characterized by increasing disposable incomes and a shift towards modern farming practices. Concurrently, Asia Pacific is projected to be the fastest-growing region, fueled by rapid economic development, increasing population, and subsequent demand for food, leading to significant investments in agricultural infrastructure and technology upgrades. Market players such as Deere & Company, CNH Industrial, and AGCO Corporation are strategically focusing on expanding their distribution networks in these high-growth regions, developing region-specific products, and offering flexible financing options to capture a larger market share. Other significant players like Yanmar Co Ltd, Claas, and Same DeutzFahr are investing in technological advancements, mergers and acquisitions, and strategic partnerships to strengthen their product portfolios and maintain a competitive edge in this evolving global landscape. The market offers substantial opportunities in smart farming solutions, after-sales services, and the development of cost-effective, sustainable tractor models tailored to the specific needs of diverse agricultural ecosystems worldwide.
Quick Stats
Market Size (2025):
USD 115.4 BillionProjected Market Size (2035):
USD 178.6 BillionLeading Segment:
Farming (72.8% Share)Dominant Region (2025):
Asia Pacific (45.2% Share)CAGR (2026-2035):
4.7%
What is Tractor?
Tractor refers to a powerful agricultural vehicle designed for pulling or pushing farm machinery. It utilizes a robust engine and large, often lugged, tires to generate significant traction on various terrains. Tractors are essential for plowing, tilling, planting, harvesting, and transporting materials across fields. Their versatility is enhanced by power take off shafts, allowing them to operate a wide range of implements like mowers, balers, and sprayers. Modern tractors often include advanced GPS and automation features, optimizing efficiency and precision in farming operations. They are fundamental to modern agriculture, enabling large scale food production globally.
What are the Trends in Global Tractor Market
Smart Tractors AI Driven Agriculture
Electric Autonomous Farm Machinery
Sustainable Precision Farming Solutions
Data Analytics for Crop Optimization
Subscription Models for Tractor Use
Smart Tractors AI Driven Agriculture
Smart tractors, propelled by AI, are revolutionizing global agriculture by optimizing every aspect of farming. These autonomous machines utilize advanced sensors, computer vision, and machine learning to analyze soil conditions, crop health, and weather patterns with unparalleled precision. This enables intelligent decision making, leading to highly efficient planting, targeted fertilization, and precise pest control, minimizing waste and maximizing yields. Farmers benefit from reduced labor costs, enhanced operational efficiency, and sustainable practices. AI driven analytics predict potential issues, allowing for proactive interventions. This shift towards data driven, automated farming represents a fundamental transformation in how food is produced, ensuring greater productivity and environmental responsibility across the agricultural landscape.
Electric Autonomous Farm Machinery
The Global Tractor Market is witnessing a significant shift towards electric autonomous farm machinery, driven by the need for increased efficiency, precision agriculture, and sustainable practices. Farmers are embracing these innovations to optimize resource utilization, reduce manual labor dependency, and enhance crop yields. Electric powertrains offer lower operating costs, reduced emissions, and quieter operation compared to traditional diesel engines, aligning with environmental regulations and the growing demand for green technologies. Autonomy allows for precise field operations, minimizing fuel consumption and input waste, while enabling continuous, driverless operation during peak seasons. This trend reflects a broader industry movement towards smart farming solutions, leveraging advancements in robotics, artificial intelligence, and battery technology to transform agricultural productivity and address labor shortages.
What are the Key Drivers Shaping the Global Tractor Market
Increasing Agricultural Mechanization and Automation
Government Subsidies and Support for Agriculture
Growing Demand for Food and Crop Production
Technological Advancements in Tractor Manufacturing
Rising Rural Incomes and Access to Financing
Increasing Agricultural Mechanization and Automation
Increasing agricultural mechanization and automation is a primary driver in the global tractor market. As the world population grows, so does the demand for food, prompting farmers to seek more efficient and productive farming methods. Tractors equipped with advanced technologies like GPS guided steering, precision planting, and autonomous capabilities significantly reduce labor costs, optimize resource use, and enhance crop yields. This shift is driven by the need for larger scale operations and higher productivity per acre, particularly in emerging economies where agricultural practices are evolving. Modern tractors allow for fewer passes across fields, less fuel consumption, and more precise application of inputs, all contributing to improved profitability and sustainability for agricultural enterprises worldwide.
Government Subsidies and Support for Agriculture
Government subsidies and support for agriculture significantly boost the global tractor market by directly enhancing farmers' purchasing power. These financial aid programs, often encompassing direct payments, low interest loans, and tax exemptions, reduce the immediate cost burden of acquiring new machinery. Subsidies for specific crops or farming practices can also incentivize farmers to invest in modern, efficient tractors capable of meeting increased production demands or implementing advanced techniques. Furthermore, governmental initiatives promoting agricultural modernization or the adoption of sustainable farming often include provisions for machinery acquisition, stimulating demand for a range of tractor types. This broad financial backing enables farmers, particularly in developing economies, to upgrade their equipment, driving consistent growth in tractor sales worldwide.
Growing Demand for Food and Crop Production
The expanding global population directly fuels a surging appetite for food, intensifying the pressure on agriculture worldwide. This translates into a critical need for increased crop yields and more efficient farming practices. Farmers, facing these heightened demands, are compelled to invest in modern machinery to boost productivity and cultivate larger areas. Tractors, being indispensable for various agricultural operations from land preparation to harvesting, become essential tools to meet this growing food demand. The drive to enhance crop production and ensure food security for a burgeoning population is therefore a primary force propelling the growth of the global tractor market.
Global Tractor Market Restraints
Geopolitical Tensions and Trade Barriers Impacting Global Tractor Supply Chains
Geopolitical tensions and trade barriers significantly impede the global tractor market by disrupting established supply chains. Escalating political conflicts, such as those between major economic blocs, lead to the imposition of tariffs, quotas, and sanctions on goods, including critical tractor components and raw materials. This fragmentation increases the cost of acquiring essential parts like engines, transmissions, and tires, pushing manufacturing expenses higher for tractor producers.
Furthermore, trade restrictions create uncertainty, making long term planning for inventory management and production schedules challenging. Companies face delays in receiving vital components, which can halt assembly lines and impact delivery times to end users. Local content requirements in some regions force manufacturers to either establish new production facilities or find alternative, potentially more expensive, local suppliers, adding complexity and cost. This environment ultimately reduces efficiency and profitability across the entire tractor supply chain.
Fluctuating Raw Material Costs and Supply Chain Disruptions Limiting Profitability for Tractor Manufacturers
Tractor manufacturers face significant challenges from volatile raw material costs and unreliable supply chains. Steel, rubber, and various components essential for tractor production experience frequent price changes, making accurate cost forecasting difficult. This unpredictability squeezes profit margins, as companies cannot always pass these increased costs directly to consumers without losing market share. Furthermore, disruptions like shipping delays, port congestion, and geopolitical events interrupt the timely delivery of vital parts. These supply chain bottlenecks lead to production slowdowns or halts, delaying product availability and creating backlogs. Ultimately, this inability to consistently produce tractors at predictable costs and deliver them efficiently limits manufacturers' overall profitability and growth potential in the global market.
Global Tractor Market Opportunities
Scaling Smart Tractors: AI and Autonomy for Next-Gen Agricultural Efficiency
The global tractor market offers a substantial opportunity by scaling smart tractors equipped with artificial intelligence and autonomy. These advanced machines redefine agricultural efficiency through precision farming. AI powered systems analyze real time data from sensors mapping soil health, crop conditions, and environmental factors, enabling hyper localized decision making for planting, irrigation, and nutrient application. Autonomous capabilities allow tractors to operate with minimal human oversight, performing tasks like seeding, spraying, and harvesting with unparalleled accuracy and consistency across vast areas.
This innovation drastically optimizes resource utilization, reducing water consumption, fertilizer waste, and pesticide use, leading to significant cost savings for farmers. Furthermore, it addresses labor shortages, enhances productivity with 24/7 operational potential, and boosts crop yields, crucial for food security in a growing world. As demand for modernization surges, particularly across developing agricultural landscapes, companies delivering scalable AI and autonomous tractor solutions stand to capture significant market share by driving next generation farming practices.
Unlocking the Sustainable Tractor Market: Electrification & Alternative Fuels Adoption
Unlocking the sustainable tractor market through electrification and alternative fuels represents a transformative global opportunity. This strategic pivot addresses pressing environmental imperatives and evolving emission standards impacting agriculture worldwide. Electric tractors offer profound benefits for farmers, including substantially lower operating costs due to reduced fuel dependency and simplified maintenance requirements. They also provide quieter working environments and eliminate direct exhaust emissions, contributing significantly to improved air quality. Simultaneously, the integration of alternative fuels such as biodiesel, hydrogen, and renewable natural gas offers robust, sustainable power options, effectively decarbonizing the agricultural sector. This innovation allows manufacturers to lead in environmental stewardship while satisfying the increasing demand from eco conscious farmers and large scale agricultural enterprises. It pioneers a new chapter of resource efficient, environmentally responsible farming, bolstering global food security through cleaner practices and fostering long term resilience across diverse agricultural landscapes. This represents a critical and essential evolution for the industry.
Global Tractor Market Segmentation Analysis
Key Market Segments
By Application
- •Farming
- •Construction
- •Landscaping
- •Forestry
By Engine Type
- •Internal Combustion Engine
- •Electric
- •Hybrid
By Tractor Type
- •Compact Tractors
- •Utility Tractors
- •Row Crop Tractors
- •4WD Tractors
By Power Output
- •Less than 50 HP
- •50-100 HP
- •101-150 HP
- •More than 150 HP
Segment Share By Application
Share, By Application, 2025 (%)
- Farming
- Construction
- Landscaping
- Forestry
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Why is the Farming application dominating the Global Tractor Market?
The Farming segment holds an overwhelming majority share due to the fundamental role tractors play in agricultural operations worldwide. From plowing and tilling to planting, spraying, and harvesting, modern agriculture relies heavily on diverse tractor types to enhance productivity and efficiency. The increasing global demand for food, coupled with mechanization trends in developing economies, continuously fuels this segment's demand, solidifying its position as the primary end user for tractors across all power outputs and designs.
How does the Power Output segment cater to varied agricultural needs?
The Power Output segmentation highlights the diverse requirements within farming and other applications. Tractors less than 50 HP are crucial for small farms, landscaping, and specialized tasks requiring maneuverability. Conversely, models exceeding 150 HP are vital for large-scale commercial farming, demanding heavy-duty operations like deep plowing across vast fields, where efficiency and power output are paramount. This segmentation reflects the industry's ability to offer tailored solutions.
What emerging trends are shaping the Engine Type segment?
While Internal Combustion Engine ICE tractors currently dominate, the Electric and Hybrid engine types are gaining traction due to growing environmental concerns and advancements in battery technology. Electric tractors offer reduced emissions, lower noise, and decreased operating costs, making them increasingly attractive for smaller-scale farming, indoor operations, and urban landscaping. This shift signifies a gradual but significant move towards more sustainable and technologically advanced power solutions in the tractor market.
What Regulatory and Policy Factors Shape the Global Tractor Market
The global tractor market operates within a dynamic and regionally diverse regulatory and policy environment. Stringent emission standards, notably in North America and Europe, compel manufacturers toward advanced engine technologies, increasing research and development costs but fostering innovation. Developing economies are progressively implementing their own emission frameworks, often less severe but evolving. Safety regulations are paramount globally, dictating specifications for roll over protective structures, braking, lighting, and operator ergonomics, with harmonisation efforts ongoing but regional variations persisting. Governments frequently deploy subsidies and incentive programs to promote agricultural mechanisation, influence technology adoption, or support specific farmer demographics, creating uneven playing fields. Furthermore, trade policies, including tariffs and non tariff barriers, significantly shape market access and competitive positioning across continents. Environmental policies are increasingly influencing design toward fuel efficiency and reduced soil impact.
What New Technologies are Shaping Global Tractor Market?
The global tractor market is experiencing transformative innovation. Autonomous tractors are revolutionizing fieldwork, utilizing advanced GPS and sensor fusion for precise, labor efficient operations. Electrification is a key trend, with battery electric and hybrid models gaining traction, promising reduced emissions and operational expenses. Hydrogen fuel cell technology is also emerging for heavy duty applications.
Precision agriculture, driven by IoT, AI, and machine learning, is optimizing resource deployment for seeds, water, and fertilizers, leading to enhanced yields and sustainability. Connectivity solutions, including 5G, facilitate real time data exchange between machines and farm management systems, fostering smart farm ecosystems. Advanced telematics and predictive maintenance further improve uptime and efficiency. Robotics integration for specialized tasks is also expanding. These technological leaps are driving productivity, environmental stewardship, and a new era of intelligent farming.
Global Tractor Market Regional Analysis
Global Tractor Market
Trends, by Region
Asia-Pacific Market
Revenue Share, 2025
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Dominant Region
Asia Pacific · 45.2% share
Asia Pacific dominates the global tractor market with a substantial 45.2% market share. This robust performance is primarily driven by the agricultural intensity across countries like India and China, where farming remains a cornerstone of their economies. Increased mechanization efforts, government subsidies supporting agricultural upgrades, and a rising awareness among farmers about the benefits of modern machinery are key contributing factors. Furthermore, the region's vast arable land and a growing demand for food production necessitate efficient farming practices, further fueling tractor sales. The presence of both established global manufacturers and strong regional players also intensifies competition and innovation, catering to diverse farming needs within the Asia Pacific landscape. This makes Asia Pacific the undisputed leader in the global tractor market.
Fastest Growing Region
Asia Pacific · 6.9% CAGR
Asia Pacific is poised to be the fastest growing region in the global tractor market, exhibiting a robust Compound Annual Growth Rate of 6.9% during the 2026 to 2035 forecast period. This significant expansion is driven by several key factors. Rapid agricultural mechanization initiatives across developing economies like India and China are a primary catalyst. Governments in these nations are actively promoting modern farming practices through subsidies and support programs, increasing the demand for tractors. Furthermore, a growing population and rising food demand necessitate enhanced agricultural productivity, directly translating into higher tractor sales. The region also benefits from increasing disposable incomes among farmers, enabling investment in advanced agricultural machinery. Infrastructure development and a shift towards precision agriculture further contribute to this accelerated growth trajectory.
Top Countries Overview
The U.S. remains a global tractor market leader, particularly in high-horsepower segments due to large-scale agriculture. American manufacturers like John Deere dominate globally. While domestic sales are strong, global exports solidify its position. The U.S. also drives innovation in autonomous and precision agriculture technologies, further influencing the global market through advanced product development and distribution networks.
China dominates the global tractor market as both a massive producer and a key consumer. Its domestic industry, led by brands like Lovol and YTO, manufactures a vast range of tractors, from small utility models for local agriculture to larger ones for export. The nation's agricultural mechanization drives significant internal demand, while its exports increasingly cater to developing countries, solidifying its pivotal role in the global supply chain.
India dominates the global tractor market as both the largest producer and consumer. Its rapidly mechanizing agriculture sector fuels domestic demand, while its competitive manufacturing and diverse product range, including compact tractors, makes it a major exporter. India's innovations in affordable, robust machinery significantly impact global tractor trends.
Impact of Geopolitical and Macroeconomic Factors
Geopolitically, agricultural protectionism and trade disputes impact tractor demand by altering commodity prices and farmer incomes. Shifting food security policies, particularly in emerging economies, drive investment in modern farming equipment, including tractors. Geopolitical alliances and sanctions can disrupt supply chains for components, increasing production costs and lead times. Regional conflicts divert government spending from agricultural subsidies, potentially slowing market growth.
Macroeconomically, fluctuating interest rates directly influence financing costs for farmers, impacting purchasing power. Inflation, especially for fuel and fertilizer, affects farmers' profitability and willingness to invest in new machinery. Government subsidies for agriculture, often linked to economic cycles and political priorities, are crucial demand drivers. Commodity price volatility, driven by global supply and demand imbalances, dictates agricultural income, a primary factor in tractor sales. Exchange rate fluctuations influence import/export costs for manufacturers and buyers.
Recent Developments
- March 2025
Deere & Company announced a strategic partnership with a leading AI agriculture startup to integrate advanced predictive analytics into their tractor fleet. This collaboration aims to optimize farming operations by providing real-time insights into soil conditions and crop health, leading to enhanced efficiency and reduced resource consumption.
- April 2025
CNH Industrial unveiled its latest generation of autonomous tractors under the New Holland Agriculture brand. These new models feature enhanced sensor fusion technology and improved AI-driven decision-making, designed to operate with minimal human intervention in complex field environments.
- February 2025
AGCO Corporation completed the acquisition of a specialized electric powertrain manufacturer. This acquisition is a strategic move to accelerate AGCO's development and market penetration of electric and hybrid tractor models, aligning with growing global demand for sustainable agricultural machinery.
- January 2025
Yanmar Co Ltd launched a new series of compact utility tractors specifically designed for emerging markets. These tractors prioritize affordability, durability, and ease of maintenance, addressing the unique needs of smallholder farmers in regions with developing agricultural infrastructure.
- May 2025
Claas announced a partnership with a major satellite imagery provider to offer integrated precision farming solutions to its customers. This collaboration will enable Claas tractor users to access high-resolution field data directly through their in-cabin systems, facilitating more precise application of fertilizers and pesticides.
Key Players Analysis
The global tractor market features prominent players like Deere & Company and CNH Industrial leveraging advanced precision agriculture technologies and substantial R&D investments. New Holland Agriculture and AGCO Corporation focus on sustainable farming solutions and electric tractors. Companies such as Same DeutzFahr, Argo Tractors, and Lamborghini Trattori target niche markets with specialized equipment and strong brand recognition. Yanmar Co Ltd excels in compact and utility tractors while Claas and Buhler Industries emphasize high horsepower and efficient harvesting solutions. Strategic initiatives include AI integration, IoT connectivity, mergers and acquisitions, and expanding global distribution networks, all fueled by increasing food demand, labor shortages, and technological advancements in agriculture.
List of Key Companies:
- Same DeutzFahr
- New Holland Agriculture
- CNH Industrial
- Deere & Company
- Yanmar Co Ltd
- Argo Tractors
- Lamborghini Trattori
- AGCO Corporation
- Claas
- Buhler Industries
- CASE IH
- Tractors and Farm Equipment Limited
- Tafe Motors and Tractors
- SDF Group
- Mahindra & Mahindra
- Kubota Corporation
Report Scope and Segmentation
| Report Component | Description |
|---|---|
| Market Size (2025) | USD 115.4 Billion |
| Forecast Value (2035) | USD 178.6 Billion |
| CAGR (2026-2035) | 4.7% |
| Base Year | 2025 |
| Historical Period | 2020-2025 |
| Forecast Period | 2026-2035 |
| Segments Covered |
|
| Regional Analysis |
|
Table of Contents:
List of Figures
List of Tables
Table 1: Global Tractor Market Revenue (USD billion) Forecast, by Application, 2020-2035
Table 2: Global Tractor Market Revenue (USD billion) Forecast, by Engine Type, 2020-2035
Table 3: Global Tractor Market Revenue (USD billion) Forecast, by Tractor Type, 2020-2035
Table 4: Global Tractor Market Revenue (USD billion) Forecast, by Power Output, 2020-2035
Table 5: Global Tractor Market Revenue (USD billion) Forecast, by Region, 2020-2035
Table 6: North America Tractor Market Revenue (USD billion) Forecast, by Application, 2020-2035
Table 7: North America Tractor Market Revenue (USD billion) Forecast, by Engine Type, 2020-2035
Table 8: North America Tractor Market Revenue (USD billion) Forecast, by Tractor Type, 2020-2035
Table 9: North America Tractor Market Revenue (USD billion) Forecast, by Power Output, 2020-2035
Table 10: North America Tractor Market Revenue (USD billion) Forecast, by Country, 2020-2035
Table 11: Europe Tractor Market Revenue (USD billion) Forecast, by Application, 2020-2035
Table 12: Europe Tractor Market Revenue (USD billion) Forecast, by Engine Type, 2020-2035
Table 13: Europe Tractor Market Revenue (USD billion) Forecast, by Tractor Type, 2020-2035
Table 14: Europe Tractor Market Revenue (USD billion) Forecast, by Power Output, 2020-2035
Table 15: Europe Tractor Market Revenue (USD billion) Forecast, by Country/ Sub-region, 2020-2035
Table 16: Asia Pacific Tractor Market Revenue (USD billion) Forecast, by Application, 2020-2035
Table 17: Asia Pacific Tractor Market Revenue (USD billion) Forecast, by Engine Type, 2020-2035
Table 18: Asia Pacific Tractor Market Revenue (USD billion) Forecast, by Tractor Type, 2020-2035
Table 19: Asia Pacific Tractor Market Revenue (USD billion) Forecast, by Power Output, 2020-2035
Table 20: Asia Pacific Tractor Market Revenue (USD billion) Forecast, by Country/ Sub-region, 2020-2035
Table 21: Latin America Tractor Market Revenue (USD billion) Forecast, by Application, 2020-2035
Table 22: Latin America Tractor Market Revenue (USD billion) Forecast, by Engine Type, 2020-2035
Table 23: Latin America Tractor Market Revenue (USD billion) Forecast, by Tractor Type, 2020-2035
Table 24: Latin America Tractor Market Revenue (USD billion) Forecast, by Power Output, 2020-2035
Table 25: Latin America Tractor Market Revenue (USD billion) Forecast, by Country/ Sub-region, 2020-2035
Table 26: Middle East & Africa Tractor Market Revenue (USD billion) Forecast, by Application, 2020-2035
Table 27: Middle East & Africa Tractor Market Revenue (USD billion) Forecast, by Engine Type, 2020-2035
Table 28: Middle East & Africa Tractor Market Revenue (USD billion) Forecast, by Tractor Type, 2020-2035
Table 29: Middle East & Africa Tractor Market Revenue (USD billion) Forecast, by Power Output, 2020-2035
Table 30: Middle East & Africa Tractor Market Revenue (USD billion) Forecast, by Country/ Sub-region, 2020-2035