The “next billion” may be more like the next two billion, or more. The faster-than-expected growth of the middle class, particularly in Asia, means the world could add 2.2 billion middle-class consumers by 2030, nearly one billion more than previous forecasts.
A new analysis from Homi Kharas at the Brookings Institution suggests the world could be majority “middle class” (and above) within a few years. The middle class is already spending $35 trillion annually; spending could nearly double by 2030. That’s one-third of projected global GDP growth.
To be sure, much of that global middle class will still be quite poor by the standards of today’s affluent countries (The Brief, Feb. 16).
Still, a bigger global middle class means more consumption and, among other things, more greenhouse gas emissions. Mitigating those impacts: increased urbanization (city dwellers produce less carbon per capita than rural residents), better education, particularly for girls (thus lowering fertility rates), and the shift toward more sustainable energy and resource-use.
Rising expectations will require “a new package of inclusive growth” says Kharas. Provisioning middle-class public goods such as health care, universal education, financial security and affordable housing will test both developed and developing countries.
Without political leadership, he warns, the win-win of global growth could be distorted into a narrative “of colliding interests between the middle class in emerging economies and those in advanced economies.”
This post originally appeared in ImpactAlpha’s daily newsletter. Get The Brief.