Special Report: The Latin American middle class (ISSN 17414474)

The growth of the Latin American middle class is without a doubt an important trend in itself: it is also useful, however, to put that growth in an international context. Research by Homi Kharas for the Brookings Institute in the US[1] published in mid-2017 used updated purchasing power parity prices to calculate the size of the global middle class. He found that around 3.2bn people could be described as members of the global middle class at the end of 2016, around 500m more than had originally been estimated (perhaps because of this his estimates of the size of the middle class in Latin America are significantly higher than those produced by the World Bank and IDB). Kharas suggested that in as little as two to three years there might be a tipping point, where a majority of the world’s population might, for the first time ever, be from middle class or rich households. Significantly, most of the new entrants to the middle class are likely to come from Asia. Middle class spending is now estimated to account for one-third of the global economy. The geography of the middle class is also changing. China and India are accounting for a bigger share of the global middle class, while the previously dominant European and North American middle class is stagnating.