The next generation of spenders

HSBC argues that the next global consumption boom will be driven by 1.2 billion additional middle- and upper-income consumers by 2050, with Asia and recreation capturing the largest gains.

• The analysis models more than 140 economies, covering over 95% of the world’s population, across five income groups defined using purchasing-power-parity-adjusted daily income thresholds from below USD20 to above USD200 per person.
• Asia is expected to account for more than three-quarters of the 1.2 billion increase in middle- and upper-income consumers, with India alone contributing close to 50%; Africa should provide 23% of middle-income growth, concentrated toward the lower-middle end.
• Despite declines in working-age populations in Europe, North America and Oceania, rising incomes are projected to lift their upper-income populations by 75%.
• Global real consumer spending is forecast to grow by roughly 2.4% annually through 2050, including 3.4% annually in Asia.
• Recreation is projected to be the strongest sectoral beneficiary, with spending growth of 3.0% annually globally and 4.0% among upper-income consumers, as richer households shift spending from basic goods toward travel, live entertainment, cinema, sports and dining.

Takeaway: Investors should focus on the long-term geographic shift toward Asian consumers and the income-driven expansion of discretionary spending, while treating the conclusions as model-based projections rather than near-term forecasts.