The economies of the Asia Pacific are booming so quickly that within 15 years more than two thirds of the world’s middle class will live in the region, according to new research.
In contrast, Europe’s proportion of the global middle class population will drop by 14%.
The figures are revealed in a report called ‘Hitting the sweet spot’ compiled by accountancy firm Ernst and Young.
The report also reckons that the Chinese middle class will number more than a billion people by 2030.
The world appears to be getting richer as the middle class is predicted to expand by another 3 billion in the next two decades.
Shift in prosperity
The global middle class is defined in the report as being those people who are earning between £6.45 and £64.50 a day, as this will give them a disposable income within their country and enable the buying of televisions, cars and other commodities.
Most of the increase in middle class numbers is predicted to come from emerging economies.
To underline this shift in prosperity, the report says that in Asia there will be more than 520 million people who can be counted as middle class, which is more than the European Union population.
In the next 20 years, those numbers will surge by 3 billion, with a large proportion of Asia’s new middle class being at the top end of incomes which brings strong spending power.
Alexis Karklins Marchay, of Ernst and Young’s Emerging Markets Centre, said: “With more people entering the middle class there will be a growing number of consumers with money and demands to help to keep the world’s economy afloat.”
He says that the increase in spending will bring with it tremendous opportunities for businesses – and they need to be ready to respond.
The markets being predicted to boom will not just be consumer goods but also health and financial services.
India is also expected to become a middle class powerhouse for consumers, although the report also highlights Brazil and Mexico as having strong growth.
The report notes that in the coming years there’ll be a wider distribution of higher wages in the world and millions will be brought out of poverty.
The report is also predicting that their spending power will outstrip that of developed countries and while their wealth is growing quickly, the pace will not spur consumption to growth levels seen before 2008.
However, the amount of money the middle class will spend in its domestic consumption will help prevent the world slipping back into recession.