The world is in the phase of a major expansion vis-à-vis increase in the middle class population, particularly in Asia. According to research, global middle class is projected to grow from under two billion consumers today to nearly five billion within two decades. The rising middle classes are considered important key driver of growth given their high income elasticity especially for durable goods and services. Hence, increase in income of middle class leads to a higher level of consumption. Therefore, the world economy can be expected to increasingly rely on the middle classes as key sources of global demand.
Pakistan has also begun to see the effects of middle class expansion and it is expected that this expansion will continue till 2030. It can be ascertained that this expansion shall be accompanied with rise in consumption and change in preferences of the middle class. This report explores the current data on middle class size and consumption and presents expected trends of consumption which can be useful for business decisions regarding production and investment.
Middle Class is a faction of people that lies in the middle of a social hierarchy. In economic terms, middle class is a broad group that exists in the middle of the rich and the poor in terms of their income and spending. The rise in the Global Middle Class is evident in every region of the world. Several Asian countries, in particular China and India, have reached a stage where a large number of people will enter the middle class and drive consumption. By 2021, assuming continuation of present trends, there could be more than two billion Asians included in the middle class households.
In China alone, there could be over 670 million middle class consumers, compared with only 150 million today! Similarly by 2030, economist believe two-third of the global middle class will live in the Asia-Pacific region, up from just under one-third in 2009 where China and India have the most rapidly growing middle class population. Pakistan is also in line with the Asia-Pacific regional middle class transformation, although the pace of transformation is a bit slower than the others According to the Global Wealth Report 2015, Pakistan has the 18th largest middle class in the world and out of 111 million adults in Pakistan, 5.7% (6.27 million) are classified as middle class.