Middle class growth in emerging markets

Entering the global middle class

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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

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.