Middle class growth in emerging markets
Entering the global middle class
Since 1995, the remarkable growth of the EM economies has brought millions out of abject poverty, but has put far fewer people into the “global middle class”.
Only a quarter of the world’s population (1.8 billion) earns US$10-US$100 — 60% in the developed world and 20% in the BRIC countries. By this definition, rather than the World Bank’s, a sobering 70% is poor (i.e., earn less than US$10 per day), and only 2% rich.
But it is this richer, global middle class that we believe will grow rapidly over the next 20 years. This growth will completely change global wealth distribution.
Forecasting a surge in the global middle class
Source: The World Bank, Kharas and Gertz 2010
By 2030, we believe two-thirds of the global middle class will live in the Asia-Pacific region, up from just under one-third in 2009. On the other hand, although North America’s and Europe’s middle class populations will stay roughly constant, their share of the population will be drastically reduced — Europe’s by more than half, to 14% by 2030.
A significant proportion of the new Asian middle class are also expected to be at the upper end of the income bracket, with impressive spending power.