Macroscope | Asean’s new consumer class could change the financial world

Southeast Asia’s economic boom is creating a new middle class, one which will help shift the balance of global demand over the next few decades to open up new opportunities for the region and the world.

Growth in this region – particularly in member economies of the Association of Southeast Asian Nations (Asean) – is changing from being primarily driven by exports and manufacturing to becoming one of the world’s leading consumption hubs.

With about 600 million people, Asean countries contain only around half of India’s population, but collectively they generate a larger GDP – forecast to be growing by 6 per cent a year on average by 2020 and be worth some US$4.7 trillion.

Asia is likely to be home to more than half of the total global middle class population by 2020, with Asean delivering more than US$2 trillion of new consumption, according to the International Monetary Fund.

Half of Asean’s projected population will be aged under 30.

With growing purchasing power comes greater aspiration, driving stronger demand for property, cars, quality education and healthcare as well as financial services and wealth management. And as populations age, new channels will be needed to save for retirement, fund healthcare and ensure adequate insurance protection in the absence of well-established social security systems.