Karen Ward and Frederic Neumann economists for HSBC are predicting there will be an unprecedented expansion of the middle class. Their conclusion is based on the expanding middle class in emerging markets that will make up more than 40% by 2050. Demographics will also play a big role as the median age in India is 26 and Brazil is 29 compared to the US of 39. Karen Ward is also expecting that 59% of gadgets will be consumed by emerging markets by 2050 up from 25% today. Financial services will increase from 18% to 56%. Another important factor to consider is the rise of the service sector in emerging markets that will help protect EM countries from movements in global trade.
Emerging market consumers will become the driving force for growth from this point forward. For these reasons it’s important to have a portion of clients assets allocated to emerging markets. Otherwise clients will be missing out on opportunities for growth and diversification in their portfolios.
Written by Jeff K.
Kennedy, S. (2012, October 18). Middle Class in Emerging Markets Means Growth: Cutting Reseach. Bloomberg Businessweek. Retrieved October 22, 2012, from http://www.businessweek.com/news/2012-10-18/middle-class-in-emerging-markets-means-growth