One of the most significant effects of the rebalancing of economic growth from mature, developed economies to fast-growing emerging markets is the explosion we are about to witness in the global middle class and the consumer boom that comes with that. The idea may be simple, but the investment implications are many-faceted. Nimble and focused local players offer the best opportunities in some areas, while western companies with strong brands and big advertising budgets are best placed to benefit in others.
“While infrastructure developments can provide excellent investment opportunities, the real long term growth story that investors should be getting excited about is consumption. Strong and consistent GDP growth in recent years is seeing rising incomes and a developing middle class in many economies. There is considerable scope for consumption growth throughout the emerging markets universe.”