The exploding middle class in Latin America is the engine for growth
In the last decade the growth in the middle class in the region has been a key engine of economic growth. Yet, there has been significant variance in the performance of the different countries. Brazil has had a remarkable performance with the middle income class growing from 39% of total population to 50% of total over the last decade.
Meanwhile, countries such as Mexico continue to have surprisingly low social mobility and depressed consumer credit penetration. We believe both of these conditions might be set for structural improvement during the coming years, as a result of the landmark reform agenda put in place by the new administration in Mexico.
According to the study “Economic Mobility and the Rise of the Latin American Middle Class” by the International Bank for Reconstruction and Development / The World Bank, which was published in 2013, the middle income class will represent 42% of the Latin American population by 2030 versus 29% in 2009. The middle income class is defined as the group of people who earn from USD 10 to USD 50 per day, adjusted for purchasing power parity.