How Is the Growing Middle Class Affecting the Emerging Markets?
Tuesday, September 22, 2015
The world's middle class is growing. According to Pew Research Center, 63 million people entered Latin America's middle class over the last decade; it is estimated that Nigeria's middle class grew by 600 percent between 2000 and 2014.
By 2030, Ernst and Young (EY) expects two thirds of the global middle class to live in the Asia-Pacific region. As this portion of the population grows in size, it is becoming increasingly affluent, in turn creating a new group of consumers with higher purchasing power than ever before. This rapid expansion will not only create economic change, but drive demand for consumer goods, such as mobile devices, luxury brands, cars, and high-quality real estate.
Indonesia is leading Asia's middle-class growth, with the number of people in the middle-income bracket expected to more than double in the next five years. Cities such as Jakarta are already experiencing the surge in middle class residents. The country's growing middle class is flocking into the capital city, increasing need for residential and commercial properties, and demanding technological products, reliable Internet connectivity and online services.
Furthermore, as consumer demand grows, more jobs will be created in the emerging markets, to meet the needs of the growing populations. The economic improvements as a result of the emerging middle class will further drive developments in education and healthcare, leading to enhanced quality of life and growth prospects for these countries.