Wednesday, August 30, 2017

The gap between developed and emerging markets to close over time


I’ve talked a lot about how China is seeing a massive middle-class boom. Back in 2000, just 4 percent of China’s urban population was considered middle class. By 2022, that figure will be a whopping 76 percent.

In short, there are expected to be 550 million middle-class people in China. That would make China’s middle class alone big enough to be the third-most populous country in the world.

But India’s not far behind…

According to the World Economic Forum, India’s middle class could grow larger than China’s by 2027.

A casual study of this chart would indicate to the observer that the GDP growth in the future will occur in many of the countries that I am interested in investing. Vietnam tops thee list followed by India.

I think India is very interesting in that all they really need to do in order to grow 7-10% per year for decades is continue to build roads, electrify rural areas, and modernize infrastructure. Just doing these things will lead to huge productivity gains and wealth creation.

The other thing to note is that the US and western Europe along with Japan will continue to represent a smaller and smaller of global growth.

Those that understand these trends will be able to create life changing wealth.

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